It would so appear, now dream world bubble in the financial world is collapsing into reality. The banking people in bed with the speculators in bed with the departments of realistate brokers are now facing the remains of a world they created. And, it is the people that will pay the price.
The price will be: More difficult terms of loans. Tightened controls of lending/credit card percentage of interest/tighter control of assets used as collateral.
The banking industry in the realestate market, were living in a created world built by them selves. Accomplished with the tools of deceit. Those tools were very simple and very much welcomed by the seller of property of both commercial and private. And with this, the buyer was pacified by the banking and lending institutions with easy credit; in some cases, tacit lies being over qualification of questionable buyers to the credit officers.
The next step in this scam, was: over appraisal of property beyond the market values. This in turn created:
Much more money to the seller of property, pleasing them more.
Much more commission amounts to the agent carrying the sale {Realestate agent and office take}
Much more in interest to the banking office for higher interest payments to cover the increased loan value of individual property sale.
Presently?
The former properties of question are returning to actual value.
Result?
The purchaser now finds that: They owe more on the mortgage, then the actual value of the property.
Further result?
The holder of the mortgage finds: With each default of mortgage, the bank is left holding a worthless portion of the loan they formerly offered on the inflated valued property.
Resulting: Screams and crys of foul by the mortgage industry for Federal help to bail them out. They wish to receive compensation for their losses they invented in the 1st place to the consumer. Now, then market banks are caught with their pants down in a cold wind blowing up their back sides.
What is occurring at present?
With the American Feds to lower whole sale interest rates, and infuse money into the market place to prop-up the dramatic losses encounter in the American stock exchange. The result is short time assistance. For this new money, is worth less then old money. The short fall is not much less then a prelude to eventual collapse as the laws of equalization of value/convertible assets sets in. In other words, actual value is not comparable to borrowed money of that interest is owed.
The international effect of this American financial experiment?
www.spiegel.de/international/business/0,1518,druck-578447,00.html
www.spiegel.de/international/business/0,1518,druck-578418,00.html
Karl