Prime Mortgage Market Next to Unwind?

     More than one observer thinks the prime mortgage market will follow in the footsteps of the sub-prime crisis.

This analysis focuses the attention on the credit bubble, instead of blaming the borrowers.

Who should be held to a higher standard, Alan Greenspan pumping up the money supply, creating the bubble, or people being pushed to buy a better home, told they can afford the teaser ARM payments, because rates will stay low, home values will go up, so you can always refinance?

Then, we got the first year over year decline in home prices since 1937.  And interest rates stopped dropping, and increased.

And homeowners are stuck with expiring teaser rates on ARMS, with the payments going up to levels they cannot afford.          The government should NOT bail out the big fellas, as it did in 1998.

We here the mortgage industry “talking points”,  how wonderful it was for them to lend money to people who could not afford to pay it back, so more people than ever before could buy houses.

And, the borrowers should not have signed up for more than they could afford.

Just remember, no one held a gun to the head of the mortgage companies to force them to make any of these loans.