by Brian Brady
Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL
Residential lending is in a pretty tough spot. Mounting losses, from former white-picket fence owners, are putting a dent in the country club sets’ wallets. The problem is not unlike the one we faced 20 years ago; bankers turned into riverboat gamblers.
That’s all changed. Today, sobriety is the buzzword in residential lending as the conduit lenders act as if borrowers were trying to pry the money for a home loan out of their children’s piggy bank. If it weren’t so serious it would be comical.
The bankers think that every American is a sub-prime borrower. Until they can reach a consensus on an economic model, Wall Street securitizers will drive this culture of paranoia into the hearts of the newest of mortgage company employees.
Who will save us from this madness? The oil merchants, of course. It’s in their best interest to jump start the little economic engines we call “our neighbors”. If the old lending model was based upon undervalued real estate, the new one will be based upon the nature of the little pink house owners, to buy pimped-out Sherman tanks for their driveways. As long as the American consumer can continue to expand his consumption of gasoline, the oil merchants will finance our homes.
Mark my words, the oil barons will be the new round of fresh residential lending capital. It makes perfect business sense. If your key account is slowing down the orders, give them a little credit to get the through the tough times. That’s EXACTLY what the sheiks will do and they’ll make a killing doing it.
The average American is NOT a sub-prime borrower. Hell, even the sub-prime borrowers aren’t really sub-prime borrowers. Americans really are honorable and most believe in a brighter future. As long as we continue to put men on the moon, develop new communication technologies, and cure otherwise incurable diseases, Americans are the best long-term bet in the world. Debt is an affirmation of that belief. Our biggest vendors believe in us because without us, there can be no three billion dollar palaces.
Relax. This crisis too shall pass…IF..you keep filing up your tank with unleaded premium.
Athol Kay says:
>>As long as we continue to put men on the moon
I know it’s a metaphor, but we haven’t put a man on the moon since Apollo 17 back in 1972. After 35 years we need a new metaphor. 😉
Sorry, just a compulsion.
December 12, 2007 — 5:17 pm
Kaye Thomas says:
I’d laugh but every word is true..
December 12, 2007 — 11:06 pm
Brian Brady says:
“Sorry, just a compulsion.”
I DO understand, Athol. I’m working on the new metaphor.
December 12, 2007 — 11:37 pm
Wade Young says:
Some say that oil is the currency of the world. Some even claim that the oil companies tell our politicians what to do. At any rate, oil is power, and the oil interest needs new homes being built. The housing market steaming ahead means oil steaming ahead. I agree that the oil interests will find a way to keep the housing market pumping. Lou Dobbs has reported that the Council on Foreign Relations wants to redraw the borders to include the U.S., Mexico, and Canada with one perimeter border around the three. The new currency would be the Amero. The plan is to make North America like the European Union. They want to accomplish this by 2010. I can’t help but think that oil interests are pushing that plan. Oil is perhaps the most powerful interest in the world. Oil needs the housing market to go forward. I think you are right that oil will keep the money flowing.
December 13, 2007 — 8:31 am