Although you had to have your head buried in the sand to be shocked by this situation, the Sub Prime market woes, which rocked Wal Street last week (contnuing into this week), is thought to because of fears of huge defaults on risky home loans. Now that rates are rising and those crazy mixed-up kids who thought interest only loans, or fibbing about their real income, was a good thing to do, have to face the music.
NY Times details how New Century, based in Irvine, CA is being investigated by the feds.
Bloomberg writes a tearful story about how some of the high flying agents and employees for Fremont are now unemployed.
One pricelss tidbit; when interviewed, an ex-employee moaned how brokers are more at fault:
Rones said Fremont and its staff shouldn’t be blamed for problems with subprime loans, since they “put people in homes.” Mortgage brokers who had more information about their clients’ ability to repay should be held responsible, he said.”There should be a thorough investigation of the brokers,” Rones said. “We’re getting a really bad rap.”
My sympathies on losing that well paying job, and if you could see me now my fingers are play the world’s smallest violin.
Hell-O! Checks and balances would be a concept worth considering if you want yourbusiness to outlast a trend.
Finally, Marketbeat blog at WSJ conjures a picture worthy of Monty python:
Run Away! Run Away!