From what I can tell, the mainstream U.S. press seems absolutely determined to write about the “mortgage catastrophe” that’s “about to hit” the U.S. borrowing scene. It’s one part frightening, one part obnoxious and one part amusing - the reporting, that is, not the pending world destruction that shall result from past subprime lending mistakes. The most recent pounding of a dead horse that I’ve read is about the mortgage crisis hitting million-dollar homes. Reporters writing in that “breathless” style and aching for anything that is either sensational or that can be sensationalized must have grabbed this one and just started running, because there’s nothing more interesting to the average American (read: “Murican”) than million dollar homes, lending scandals and foreclosures all rolled into one story.

Sure, I’m being a bit cynical, but there is still an element of truth in the reporting. There are, for example, million-dollar homes being foreclosed upon. Well, let me put an asterisk by that - the “million-dollar homes” referenced in the story WERE purchased for $1 Million or more, but they’re going in auctions for less than that. So I guess they’re not really million-dollar homes any more, are they?

This is, of course, the ugly point. Anyone in the real estate market right now has to be watching with some trepidation, as I’ve noted in the past. I myself am a bit irritated by the constant stories (bet you couldn’t tell that), and I’m at least a bit fearful that my equity is withering away. In reality, however, my own properties are in solid areas where only modest price “corrections” have occurred, and I plan on living in my current primary residence for some time. I’ve also got three years left on my commercial financing and those properties are doing quite well as an investment.

But what about for Joe Homeowner or would-be first-time buyers? It’s tough, I’d guess. There’s no more smoke and mirrors to be had in the lending game right now, so some of those questionable loans that were letting folks buy million-dollar houses who had no business doing so are probably on the shelf for now and for quite some time to come. The real tragedy here, I think, are folks like me who are quite creditworthy but will now have to go through more rigorous loan application processes because of others’ past mistakes.

On the bright side - if you’re looking to buy houses for under-market value, it’s a good time to do so. When folks start panicking - that’s when there are deals to be had, so I say bring on the fire and brimstone, the world really IS ending and the economy is going to collapse tomorrow…and if you want to sell your house now while it’s still worth SOMETHING, get in touch with me.

Tags: foreclosures, mortgage crisis, subprime lending

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