Straight Talk on the Mortgage Mess from a Mortgage Industry Insider, as featured at MarketWatch, 12:11:23 PM, December 6th, 2007.
Even before this mortgage mess started, this insider with 20 years experience in the mortgage industry kept saying that this is going to get real bad. He kept saying this was beyond sub-prime, beyond low FICO scores, beyond Alt-A, and beyond the imagination of most pundits, politicians and the press. When he was asked why somebody from inside the industry would be so emphatically sounding the alarm, he simply replied, “Somebody’s got to warn people.”
Since then, Mark Hanson has spent most of his career in the wholesale and correspondent residential arena, primarily on the West Coast. So far he has been pretty much on target as the situation has unfolded.
His current thoughts, which I urge you to read, follow a short introduction, the first part of which is a synopsis of the New Road To Serfdom article in the May 2006 issue of Harpers, written by Michael Hudson, who saw what was coming:
"Although home ownership has been a wise choice for many people, this particular real estate bubble has been carefully engineered to lure home buyers into circumstances detrimental to their own best interests. The bait is easy money. The trap is a modern equivalent to peonage – a lifetime spent working to pay off debt on an asset of rapidly dwindling value.