Countrywide Being Investigated By FBI

[gherman]

Boy I didn't see this one comming

http://money.cnn.com/2008/03/08/news...ion=2008030810

[BonosSaint]

The fallout is going to affect borrowers way beyond the subprime now. Credit is going to tighten in an already difficult market. Credit scores that used to be considered excellent are now becoming the bare minimum. Private mortgage companies are getting hit so their criteria are stricter. The rules are changing so quickly now. Everybody got lax, not just the subprimes. It's a necessary adjustment, but it's going to be painful all the way around for a while. In the non subprime, It got to the point where everyone got lazy, depending on the credit score almost exclusively for a loan decision, approving loans up to a 65% total debt ratio (housing and monthly debt) against gross income. How were people going to eat, buy gas, pay for utilities? Too many people weren't thinking. And too many people got greedy.

[gherman]

Originally posted by BonosSaint
The fallout is going to affect borrowers way beyond the subprime now. Credit is going to tighten in an already difficult market. Credit scores that used to be considered excellent are now becoming the bare minimum. Private mortgage companies are getting hit so their criteria are stricter. The rules are changing so quickly now. Everybody got lax, not just the subprimes. It's a necessary adjustment, but it's going to be painful all the way around for a while. In the non subprime, It got to the point where everyone got lazy, depending on the credit score almost exclusively for a loan decision, approving loans up to a 65% total debt ratio (housing and monthly debt) against gross income. How were people going to eat, buy gas, pay for utilities? Too many people weren't thinking. And too many people got greedy.

Yup. Its going to get messy and we are just starting. The fed is already getting ready for the bailouts. they figure 208 banks right now that they are watching but the smaller ones. They will still have a huge effect on the already weak citys like Detroit or Cleveland.