Monday, August 20, 2007

Wake up... ?

Saturday, August 04, 2007


In plane English. When you borrow money on a home that home essentially become the property of the lending company and the value of that lending company is based on the value of the property of the home they just borrowed money on. That's right your lender doesn't have the money. They borrow money from the fed and set their rates based on what they borrow the money for and the difference between your rate and the fed rate is their profit.

Now when the innate value of the lender is on the decline because the housing market is in decline they (the lender) lose the ability to borrow money. The lender goes out of business and no one and I mean no one wants the loans they own because they are worthless.

The only thing that can happen is the mortgage has to be called. Who gets the mortgage call? You the borrower. You can't find a lender to cover your home loan for an interest rate you can afford. You lose your home. Housing prices crumble. Interest rates soar. Inflation soars cycling in to deflation because no one has enough money and hence the value of homes, cars, the dollar collapse...


Thursday, August 02, 2007

I used to think... I don't anymore but once in a while a kid reminds me