| Lessons of the housing credit crisis
Because of the adjustable rate mortgages, we will probably see another round of foreclosures in 2008, but the end is in sight, said northern Colorado economist John Green. The good news is changes have been made. Credit is harder to get. Lenders don't make the kind of wild offers they once did.
It is also important that we, as home buyers, also learn from the turmoil. We must scrutinize lending offers and be conservative when looking at prices. Buyers need to make sure they can afford the homes they get. It is also important that the industry remember this and retain the hard lessons about letting people buy homes their income can't support.
While a nationwide recession looms, thanks in large part to the lending crisis, if we all learn from the foreclosures we can move forward, albeit with a "buyer beware" attitude.
Behind Subprime Woes, A Cascade of Bad Bets
Three years ago, Colorado truck driver Roger Rodriguez was in the market for a new mortgage loan. With radio and Internet ads trumpeting easy approvals, he picked up the phone. That call set into motion Mr. Rodriguez's descent into the subprime mortgage mess. Over the next several months, his adjustable-rate loan passed through many hands. These included a local Denver broker, Livingston, N.J., finance company CIT Group Inc. and a Greenwich, Conn., unit of Royal Bank of Scotland Group PLC. Eventually, a piece of Mr. Rodriguez's loan landed in mutual funds run by a Tennessee investor named James C. Kelsoe ... .
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