April 29, 2009
I came across a rather alarming statistic in the WSJ this morning: ?About half of seriously delinquent borrowers have a second mortgage, according to Credit Suisse Group.? That is, half of the ?subprime? borrowers weren?t just buying houses they couldn?t afford; they were also attempting to turn their new McMansions into their own personal ATMs. They?d take out a ?home equity loan? as either a replacement for an actual job or as way of supplementing their totally awesome lifestyles. And all these second mortgages were, no doubt, ?securitized? much like the subprime garbage. I?m also sure that sooner or later all these poor little victims of greedy capitalism will be pleading for a federally subsidized loan-modification program from Obama. More evidence, as of we needed it, not only of the phoniness of American prosperity over the past decade but that there are many more shoes to drop in our unfolding economic meltdown.
Daily updates with TM’s latest