tag:blogger.com,1999:blog-27951078.post5736602455075193386..comments2024-02-02T05:45:33.724-06:00Comments on Incoming: John Phippshttp://www.blogger.com/profile/03245790061133614986noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-27951078.post-44816725970738019562008-10-07T06:27:00.000-06:002008-10-07T06:27:00.000-06:00Doesn't the home mortgage crisis have less to do w...Doesn't the home mortgage crisis have less to do with the home values than it does the inability to service the debt? The underlying value of non income producing property should have no impact on the borrowers ability to repay the debt. The problem lies in the fact that people borrowed money that their cash flow could not support!<BR/><BR/>Lending institutions made these loans regardless of the borrowers ability to repay because it resulted in an interesting game of balance sheet gymnastics. As long as the value of the asset backing the loan continued to increase so did the asset side of the lenders balance sheet. Once the underlying value of that property began to decrease so did the asset side of their balance sheet. As the lenders net worth dropped so did their ability to make new loans. When loans dried up the housing market continued to slide because it is almost entirely dependent on the ability of the buyer to borrow enough money to make the purchase.<BR/><BR/>Lending institutions bet the "house" that the market would continue to go up. I've been farming long enough to know that that is a fantasy!Farmer 4ezhttps://www.blogger.com/profile/11114146684729920329noreply@blogger.comtag:blogger.com,1999:blog-27951078.post-23223481256596497322008-10-05T14:17:00.000-06:002008-10-05T14:17:00.000-06:00If the housing market keeps dropping....Farmers ca...If the housing market keeps dropping....Farmers can buy sub-divisions and convert them to farmland, couldn't they??Ol Jameshttps://www.blogger.com/profile/08104714377087960892noreply@blogger.com