Friday, November 16, 2007

Going On Vacation

I'm heading off to Kansas today for the Thanksgiving holiday, so there won't be any posts for a while. My PC also crashed and I'm having an extremely difficult time re-installing Windows, so even when I get back, it might be a while before I can post again..

Two quick notes:

Goldman Sachs today announced that mortgage lenders may need to scale back lending by up to $2 trillion dollars which could lead to a "substantial recession."

In response to the mortgage meltdown, the House voted to strengthen the rules on mortgage lenders. I don't have enough information now on the details of this particular bill, but I do think something needs to be done to help prevent the current situation from happening again. One thing that troubles me is that the bill prohibits balloon payments. As a private or hard-money lender, all of the mortgages and loans that I make have balloon payments. They are interest-only loans with the entire principle due in a balloon payment at the end of the term. However, I am not sure if this bill would apply to private money lenders, so it may not even affect people like me.

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