As I’ve indicated in other posts, I believe the housing market fall out has just begun to show itself. We read in the Des Moines Business Record that,
Earlier this month, three Central Iowa banks filed foreclosure
petitions on more than $6 million in past-due mortgage loans on 25
residential properties owned by Oaks Development Co. and its general
partners, John C. Kline and Randy Walters.
These are the cracks in the foundation of a segment of the economy that doesn’t often fall softly. When purchases slow, inventory sits, cash flows become tight, property values drop, debt ratios get ugly, and banks use contractual provisions to stop the bleeding best they can. The death spiral of many builders/developers is surely spooling up.
I’d like to complain about bailing out the sub-prime lenders/borrowers. Bottom line: The politicians kept screaming about how "less served" groups were not getting mortgages and to "open up credit options for them" (lower the standards to get unqualified people…well….qualified). You got your wish, now the same politicians are lambasting the "greedy" lenders for being reckless. As usual….the old Potomac Two-Step.
I resent bailing out those who knew darn well that the fixed rate loan, although higher for "that moment" would probably be the best bet vs. interest only ARM’s with teaser rates, etc. Shame on you.