Home Mortgage Meltdown?

After nearly three (3) years of declining home prices in some markets, the
free fall in home values on Main Street is beginning to impact Wall Street.

Bear Stearns announced that two (2) of the hedge funds that it manages, have
had to file for bankruptcy last week because they are basically "worthless"
(their words, not ours).

These two (2) funds were chartered in the Caymen Islands and will therefore
need to file for Chapter 15 Bankruptcy.  For more information on Chapter 15
Bankruptcy, follow this informative link.

http://www.creditmanagementworld.com/bankruptcy/bankruptcy01.html

The bloodletting has not stopped with the fund managers themselves, but has
also impacted top management at Bear Stearns.  It was recently announced
that one of the Co-Presidents at Bear Stearns will be stepping down from his
job.  For more news on this story, refer to this webpage.

http://biz.yahoo.com/ap/070805/bear_stearns.html?.v=5

As if that were not bad enough, but home builders are also starting to feel
the pinch.  There would seem to be more sellers than buyers in this current
market, and very little interest in new homes, when existing homes are
selling at foreclosure.  Read more on this topic here.

http://www.madison.com/tct/business//index.php?ntid=204105

Of course, there could be salvation, but only if the Federal Reserve would
be willing to cut interest rates - by a whole percentage point.  That seems
unlikely at this juncture, as many feel that this might be a mess that smart
people should have seen coming; interest only mortgages and high risk loans
to people that would otherwise not qualify for a mortgage.  If you make your
bed that way, then you have to sleep in it later, the saying goes.

But, it will be interesting to see how this plays-out in the next few
quarters ad mortgage lenders and major banks announcing their earnings.  For
more information on how to review business financial statements, go to.

http://www.creditmanagementworld.com/analysis.html