What’s going on in Mortgages and Real Estate? Is it time to run away from “Subprime disaster” or look for the opportunities?

Real Estate market is now extremely scary for plenty of people. Others believe that it’s a great time to look for “the deals of a lifetime” to make sure profit.

Where are you staying on this rocking boat?

It is not an easy topic to talk about, as everybody has a different opinion.

Let’s start from a sad view on the matter (a cheerful one will follow):

The Wall Street expression “Bulls make money, Bears make money, pigs get slaughtered” is now echoing on every street. The last few years of “cheap money” have produced a lot of “pigs”. Now it is time for them to get slaughtered.

People were greedy; they saw others getting rich in Real Estate and they wanted to share the upside. Many jumped in with their life savings. Some borrowed on top of it.

Financial Institutions were even greedier – new complicated mortgage-backed packaged products were the best way to make huge quick profit, boost earnings and receive multimillion-dollar bonuses.

Now the reckoning is here. And it’s a sad one. People are losing everything they worked for and going into foreclosure. Mortgage brokers are stuck with unsold mortgages and declaring bankruptcy. Banks are not in much better shape either; they are writing off huge loses and adjusting earnings.

Confidence is falling, unemployment is rising, and the economy is slowing down.

Who knows where the bottom is…

Quote by Bernard Baruch: “Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars.”