Avante Real Estate – East Bay Real Estate Blog

East Bay Blog

March 10th, 2008 7:36 PM

The news keeps coming... Today we find out over the news wire that Countrywide Financial, the largest U.S. Mortgage Lender is being investigated by the FBI for securities fraud. Although it is surprising to hear that a company as large as Countrywide is being investigated by the FBI, I have to say it probably should have been expected. After any economic event where people lose a lot of money, and where it affects our economy as a whole, there needs to be someone/something to blame for the mess. Just think back to the last major economic event that had such a broad effect on people's pocket books. Back in the late 90's we had the tech boom, followed by the bust. After the stock market corrected the government started to investigate who was to blame...hence we had the CEO's of WorldCom, Enron... and all the rest. These executives were the villains of the tech boom/bust.

Now we are in the midst of another slumping economy due in large part to the slumping housing market. Many of the problems can be traced to the lax lending standards that the large mortgage lenders had during the run up of real estate values during the years of high appreciation. Now there must be someone to blame for this mess, my bet is we will see some mortgage executives getting carted off to jail before all is said and done.

Don't get me wrong, I have no idea if any type of fraud occurred at Countrywide or any of the other mortgage lenders that are being investigated. However, if the economy continues to head toward recession, which many economists believe we are already in, there will need to be some villains where we can lay the blame...

As always these are only my opinions, and you are always free to respond, until next time...

Posted by Ted & Lucy Ramos on March 10th, 2008 7:36 PMPost a Comment (0)