Mortgage Mess Difficult to Ignore

Take a look at the front page of the Seattle Times website this morning:

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That's Coalition warns of "mortgage tsunami", followed by Accounting, executives at lender New Century investigated, Fraud charges at Metropolitan Mortgage & Securities settled, and of course Mess unlikely to break economy.

First off, I don't think the term "mortgage tsunami" is appropriate, since a tsunamis come with little warning and through no fault of those in their path. I'd call it more of a "mortgage harvest," considering that the mortgage banks and homebuyers are simply reaping what they have sown.

And why is it that they would like us to believe that the ongoing mortgage "mess" is not going to "break" the economy?

However, while stocks of subprime lenders have been pummeled, the industry's effect on the broader market is likely to be muted. "All told, subprime mortgages are worth about $640 billion, and that isn't chump change," says Bob Gay, economist and managing partner of Fenwick Advisers. "However, it's only 0.6 percent of annual gross domestic product. ... On the consumer side, it's not like every subprime mortgage is going to default and get repossessed."

Delightful. An argument that basically amounts to "because we say so."

Hold on tight and enjoy the ride, everybody.

Saving money is possible

Today, Everett Herald reporter Debra Smith shows how Laura & Jon Ward saved $9,000 by using Redfin. The caveat is that they did most of the legwork in finding their home to buy. How much work would you be willing to do if you could save thousands? Some have the time, some don't.

"Taking $20,000 in commission? That's absurd. If I'm willing to do the work, I don't want to pay full commission."

- Jon Ward, Mountlake Terrace Homeowner.

The National Assoc. of Realtors projects that the majority of people start their home search online. My personal experience coincides with this too. I found my own home via the internet (at the Seattle Times.) But back in 2004, Redfin didn't exist, nor Zillow, or Shackprices.

It appears the frontier of financing is changing too. The problem is that many consumers are unaware where to get information to help keep money in their wallet. Web logs are probably blowing those doors wide open. Doors that have been kept closed for so long.

-S-Crow