I wish I were bright and articulate enough to answer the questions above without any help.
Luckily, I came across this video and slide show during past week. They provide a simple (video) and humorous (slide show) way of understanding what happened with the mortgage subprime meltdown, why it happened, and what may lay ahead in the future for the rest of us.
The video is provided courtesy of Mr. Dan Green of The Mortgage Reports. Going back to the basics with stick figures and drawings is an easy way of understanding a difficult concept. Take a look below or the link for the video can be found here.
I received the second slide in an email from a local friend and real estate/economy pessimist here in Big Bear, Mr. Jack Hartley. He said it was, “even simple enough for you real estate people to understand.” If there is ever anything negative to pop up regarding the current status of our economy, Jack is sure to forward it my way. Keep’em coming Jack!
I am not sure of the author of the slide show, but it is a simple, crude, and quite humorous way of looking at the mortgage situation.
A word of caution however, there are some grown-up words throughout so don’t watch if you are easily offended.
Who knows for sure when the total fall out from these mortgages will work its way through the system. Fortunately for Big Bear, we are not seeing a large amount of REO, bank owned, or short sale properties on the market. We do have a few, but not the vast majority like I hear are coming up in other parts of CA.
Getting a loan these days is all about going back to the basics of having good credit, a solid job/income, a sizable amount down (close to 20%), and good income to debt ratio.