Saturday, March 10, 2007

Simple Math

You have no savings and buy a house with 100% financing. Investors have money to invest and want a good return. Who gets burned? Who has a chance to lose money? It doesn't seem to be the home buyer, does it?

Loan qualifications are changing and it's a little too late. The damage has been done. If you have nothing, and borrow 100%, you still have nothing. At this point, if facing foreclosure, you the home owner might wonder, why not just wander away, what can they possibly get out of me?

The real question,if you are an investor, is, "Whose money was that?" The irritating part of that sentence is the verb "Was."

There were winners in this fiasco and they were probably on commission. The losers are beginning to understand the math. The only trouble here, is that a lot of people don't even know that they were in the game---yet.

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