Actually the [tag-tec]mortgage[/tag-tec] mess won’t affect most of the economy.
The landing has been soft and that really isn’t going to change. No bombs, no crash.
For most investors and homeowners 2007 will be uneventful. Except for the fact that homes will be selling for about 5 percent less than last year. That’s not earthshaking. And there won’t be a recession because of it.
As we know, the trouble is will subprimers. We’ve already talked about that.
What can we expect from Washington?
Not much. A lot of talk; pretend reaction. Posturing. Politics.
That means more regulations. More supervision of the playground, which is something Washington loves to do.
Will it actually improve anything? Will distressed subprimer homeowners really be helped?
It’s too little too late. Future subprimers will probably stay in rentals longer because Washington will crack down a little on lenders.
That means there will be more demand for rentals, which is good for us.
Will the Federal Reserve act?
No. [tag-ice]Interest rates[/tag-ice] won’t be lowered because of inflation fears.
So the distressed subprimer homeowners are stuck with flawed [tag-self]mortages[/tag-self] unless they can work out new financing. And it’s still a very good time to find new deals.