THE CREDIT SPIRAL

The credit crisis is indeed a crisis as it spirals down to all aspects of our economy. With house values plummeting resulting in forecloses beyond belief may be a foreshadowing on what is to come.

First there is the cost of foreclosures. Good people thought they were buying into the American Dream, after all, real estate was supposed to be the best invest you can make. Unfortunate bad deal were made by mortgage companies. With credit too easy and a runaway real estate market, it was difficult to turn down the dream of home ownership. The credit crisis and resulting foreclosure effects both the middle and upper income. Both new home ownership and getting into the retirement home was easy and affordable. Now a few years later, house prices are dropping. Some people bought into the the real estate market for $400,00 is now the home is worth only $215,000 but they still have that mortgage on the $400,000 value. This is not supposed to happen, after all real estate is the best investment you can make.

Trickle down economics. The real estate market is hurting, even though ask any real estate agent, now is a great time to buy. So now we have record foreclosures and people reluctant to buy, as maybe we haven't seen the bottom yet, that means people are not buying the new refrigerator, new carpeting and other new home improvements.

Mortgage companies are also feeling the pinch with millions in bad loans, we're seeing some companies go out business and others dramatically reducing their work force to compensate.

Now you have the economic stimulus package. In my opinion, too little too late. Is $66 per family truly going to help the economy? I supposed the Bush Administration has to show that they are doing something.

B L O G SPOT

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