Do you find yourself confused about the Subprime mortgage crisis we are facing, awash in disinformation from a the mainstream media?  I certainly was! so I did some googling, and researched to find out for myself.

I recently published an article on Frederick.com entitled “The Mortgage Meltdown:  A Realtor’s Perspective”  Here are some exerpts:

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*Disclaimer*
This content is prepared for those outside the current “sound bite” culture.

The Culprit: The Subprime Mortgage. Before we begin our detective work, let’s define some terms. Subprime means just what it sounds like, less than prime. A subprime loan, given to a subprime borrower, is for the person who does not qualify for a prime loan, either because of bad credit, or not enough credit, or high income to debt ratio…. The problem started when subprime lending began to grow to a very risky level. It is estimated that 21% of current loans are subprime loans…

The Accesory to the Crime:  The Political Climate.  The Political Climate of our time repeats the mantra:  “Affordable Housing“, the highest and best outcome, even at the cost of common business sense….

Willing Accomplice #1: The Real Estate Boom and Bust.  In hindsight, we see many factors that contributed to the Boom, and inevitably caused the ensuing Bust….

Willing Accomplice #2:  Securitization. Securitization has been used in different forms since the middle ages. In this country, we’ve experienced crisis no less than 6 times because of securitzation between the Civil War and WWII. …

Willing Accomplice #3:  Credit Rating Agencies.  Credit rating agencies are now under scrutiny for giving investment grade ratings (BBB - AAA paper) to these MBS’s with subprime loans (C paper)….

Willing Accomplice #4: Fannie Mae and Freddie Mac: Fannie Mae buys loans from mortgage originators, repackages the loans and sells them on the secondary market…
Willing Accomplice #5: The Community Reinvestment Act: The Community Reinvestment Act,…The CRA gave ratings to banks based on the amount of loans they gave to create affordable housing. 

Willing Accomplice #6: Congress. The Real Culprits, who should have done something, could have done something, but wouldn’t….

Read the rest of my article:  The Mortgage Meltdown:  A Realtor’s Perspective


                     
                    

                   The Highland Real Estate Group                      
         Chris & Karen Highland * Frederick County MD Real Estate Agents
                        Specializing in Frederick County Real Estate 
                                       301-831-9947
                                  Real Estate Teams, LLC
                                      isell4u2@msn.com 
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