NYTimes opines: Hanging in the balance is the nation’s housing market, which has been a big driver of the economy. Fewer lenders means many potential homebuyers will find it more difficult to get credit, while hundreds of thousands of homes will go up for sale as borrowers default, further swamping a stalled market. read
1 Comment
I wouldnt worry. The banks have first right to the properties nomatter what happens to the people who defaulted. Thus the bank is protected by what the article terms as "tranching".
These layers of risk are sold all over the world, especially overseas hedgefund investors. So dont worry - they'll be left holding the bag, not us. However the bag is so diluted, and packaged with other investments, the impact is softened as the world absorbs the hit. Or so in theory anyways.
Block this user
Are you sure you want to block this user and hide all related comments throughout the site?
Archinect
This is your first comment on Archinect. Your comment will be visible once approved.