Mortgage Market Woes: A time for Risk AND Attitude Adjustments

I clipped the following from the NY Times as I felt it gives us a pretty good indication of what to expect in the months and even years ahead. Could this 'subprime' melt down make the S&L crisis look like a 'cake walk'? Is there any relationship here between the 'junk bond' years and 'subprime' years? Regardless, I was pleased with the announced proactivity from the administration and FHA. Is it possible for public and private organizations to collaborate on processes and products that might help to alleviate capital market fears? I would suggest that consumers find ways to communicate and 'exploit' their individual economic-carrying-capacity as an effective strategy in negotiating work-out terms with lenders. This might require increased transparency and a willingness to be more accountable to a lender to avoid what historically would be a foreclosure. With today's technology there are ways to achieve better data for both borrowers and lenders to make better financial decisions through the next several years. Thank You FHA/HUD and the administration for 'stepping up'. As a People now, let's do our part.

Greg Johnson, Co-founder
www.wealthbuilderuniversity.com
www.wealthdollars.com

clipped from thelede.blogs.nytimes.com Bernanke provided additional context and information surrounding the Fed’s decision on August 17 to lower the discount rate, broaden the terms on discount window borrowing and issue a revised economic statement. In particular, the deterioration of financial market conditions combined with the tightening of credit in the first two weeks of August had appreciably increased the downside risks to growth. More specifically, the further tightening of credit conditions increased the risk that the weakness in the housing sector would be deeper and more prolonged than expected, with possible adverse affects on consumer spending and housing more generally.