Wednesday, August 27, 2008

Safe as Houses

A LA Times story from Monday says that in 2004 the FBI was aware of the impending (at the time) mortgage crisis.

And though the FBI had illuminated the problem, the LA Times said they were focused on other priorities at the expense of the U.S. housing market.

From the story:

"Today, the damage from the global mortgage meltdown has more than matched that of the savings-and-loan bailouts of the 1980s and early 1990s. By some estimates, it has made that costly debacle look like chump change. But it's also clear that the FBI failed to avert a problem it had accurately forecast. ...

The FBI says it now has about 200 agents working on mortgage fraud, but critics say the agency might have averted much of the problem had it heeded its own warning."

The story goes on to say that the FBI had 1,000 agents working on white collar crime and banking fraud cases during the savings-and-loan bust.

On a similar note, CNN has a story on the quality — or lack thereof — of homes on the market right now, citing problems with mold, maggots, trash, and general disrepair.

From that story:

"Most of these mutts are foreclosed properties that have been permitted to fall into disrepair by lenders overwhelmed with thousands of vacant homes. If these houses sell at all, they're going for bargain basement prices that are hurting home values throughout the neighborhood.

'I've never seen so many houses in this condition before,' said Ray Anderson of Buyer's Advantage Real Estate in Auburn Calif., near Sacramento. 'And I've been in the business 20 years. I've seen bank-owned properties in the past. They were never like this.'"

Of course, if you aren't feeling the economic crunch and don't mind having to put some hard work into a place (or paying someone to put some hard work into it), it seems like now would be a good time to buy a house or investment property.

3 comments:

Polar Donkey said...

http://theautomaticearth.blogspot.com/

That blog is scary.

Subprime was just the beginning. Alt-A and prime mortgage failures are now beginning to bring down banks.

marycash said...

PD,

You always know just what to say to cheer me up!

Anonymous said...

Don't forget, there is also the time bomb of home equity lines of credit that could blow up as well...it's not like the housing bubble wasn't predicted, plenty of analysts and commentators and financial journalists indicated there was a potential problem brewing several years ago, but just like the tech stock bubble, people knew it had to end badly but no one wants to hear it when the gold rush is underway...