The Acme Mortgage Company. Be Popular. Fool Your Friends. 0
The Washington Post dissects the real estate crash, with a focus on La La Land. The whole thing is worth the 10 minutes it takes to read it. Here’s a nugget:
Some lenders wooed borrowers with generous terms once reserved for the most creditworthy. Mortgage financiers Fannie Mae and Freddie Mac, eager to profit, started buying more of these loans — in effect, subsidizing the market.
Blinder used the Wile E. Coyote character in the old Road Runner cartoons to explain what happened to prices next: “The coyote is running, running until he runs off the mesa, suddenly he’s out there in thin air and stays there for a while — then crash,” he said.
The markets that crashed the hardest were the ones where prices had climbed the fastest.
