Subprime Ripples are Turning Into Waves

You have great credit, a stable job, and cash in the bank.  This subprime mess won't affect you, right?  Wrong!

The news coming out of the 10th largest mortgage company in the United States shook the equity markets today.  American Home Mortgage (AHM) disclosed a cash shortage, that it has been cut off from it's credit lines, and does not have the cash to fund $300 MILLION of mortgages it agreed to fund in the coming weeks.  Someone say it for me, OUCH!

This is only the beginning that starts a wave throughout the financial and real estate markets.  What do all those home sellers do when their buyers financing falls apart?  What about the other national lenders who are on the brink?  They will be making a run on their credit facilities, much like the savvy airline executives did right after 9/11.  Those that aren't so fast will have their credit lines closed, thus forcing them to not make good on loan commitment they have made. 

There sure are going to be a lot of anticipated home purchase closings postponed indefinitely in the coming weeks.

What about the resulting loan defaults and resulting bank-owned properties?  Take a look around your neighborhood.  Home values, they be a changing, and not in a good way.

Proper advice has never been more important.  The consumer and industry focus on RATE is a major reason we all got ourselves in the mess.  As the ripples turn into waves only those with proper planning will not sink.  Those with holes in their finances will become exposed and sink.

Learn how I can help you at www.BrettGrendahl.com