Wednesday, March 7, 2007


I hate to admit it, but I’ve developed a bit of an addiction. It started a few weeks ago in this space when I listed some of my favorite “Housing Bubble” blogs, all of which I bookmarked and refer to at least once a week when I’m in need of inspiration. (The MOST creative of these remains, which is just hilarious in the way it roasts property flippers who in the process of being burned at the stake in Southern California)

If you have watched the news this week, you know there’s a meltdown going on right now in the lending industry, specifically with the Alt-A (slightly less than perfect) and subprime (way less than perfect) credit markets.

Last year, a friend of mine told me half of what was being funded in Orange County was 100% financing product, a claim I found so ridiculous and beyond belief that (at first) I laughed it off. But upon further review, it didn't turn out to be such a far-fetched statement after all. And nearly 1/3 of the properties being purchased in Southern California were 2nd homes or investment properties, which clearly showed that wild-eyed investing was still cool, even as the housing market was finally hurtling back toward earth.

So here we are today, many months later, and suddenly all those 100% loans aren’t looking so hot, and all those ARM’s from 2003 and 2004 are now adjusting upward to the tune of 2% (or more) a year, and hey, who turned out the lights???

Goodbye New Century. Adios Ameriquest. Strike up the band, another one bites the dust.