Peter Pays Paul

Inside commercial hard money lending.

18 Oct

A Wall Street Insider on the Economic Crisis

Category: Distressed Property, Finance, Life-in-General, Real Estate Finance

I tend to check Yahoo! Finance frequently. It was very useful when I was working in wealth management. Laura Rowley a commentator on Yahoo! Finance lays out an interview with a Wall Street broker.

The broker’s outlook is not very bright. It gives a big of insight into why the market fell the way that it did.

But stepping back, the critical error was that everyone [thought] there would not be a substantial, nationwide decrease in real estate prices. The whole subprime debacle was predicated on the fact that people said, “Well, this borrower is not really credit worthy and can’t afford the house, but in four years it will be up 20 percent or more.”

It was widely believed that if you had bad mortgages from different geographic areas that all those [real estate markets] weren’t going to go down together….

Check it out here.

Tags: Credit Crisis, Wall Street


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Posted Saturday, October 18th, 2008 at 9:09 am
Filed Under Category: Distressed Property, Finance, Life-in-General, Real Estate Finance
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