Exotic Mortgages

As you've seen from the news, the Financial Markets are in turmoil at the moment as a result of the mortgage lending crisis.  Personally, however, I'm not taking any action with my investments.  I'm diversified adequately, yet, I will take some losses over the near term.  I'm in this, however, for the long haul and I'm not going to make the mistake of trying to move money around and incurring transactions costs when the best thing to do is to continue to dollar-cost-average and remain diversified.

Over the course of my lifetime, I will ( and have already ) experience many market down turns.  This is the nature of a capitalist economy.  A couple examples of poor economic times I've managed through...

1990 - I graduated from college during a very poor job market.  I interviewed with 26 companies during my last semester at Texas A&M and received 2 job offers.  Most of the companies that interviewed on campus simply made their obligatory visit to campus without any intention of hiring anyone during those years.

2000 - I saw the dot com company I was working for run out of money and close their doors during the tech bust of 2000.  Within two weeks, I was fortunate to land a solid job in the Healthcare industry here in Tulsa.

2007 - I'm now observing the economy teeter on the edge of another economic slowdown as a result of the mortgage crisis and housing speculation.  Fortunately, I'm not the type of person who thrives on impressing others with how much I have, therefore, I have not put myself in a situation with my current mortgage that would jeapordize my financial life.

Below are a couple sobering articles...

Money and Markets
Soaring Foreclosure Rates
American Dream ?!?!? ( not for everyone )

I also read a small blip in Kiplingers today that stated "homes lose about 1% of their value for each foreclosed property within an eighth of a mile".

In my view, the following list of ridiculous mortgage types are to blame for the current mortgage crisis.  How is it that the US Government could not regulate the mortgage industry a bit closer so as to prevent such ludicrous instruments from entering our economy?

I really like the "Good For" section of the article.  Notice how many of the "Good For" options state something like..."for sophisticated borrowers" or "young lawyers or doctors" or "have large cash reserves" or "young professionals", etc.

I don't see any notes in the "Good For" section that read...

For people that want their mortgage to consume over 50% or more of their gross income

For illegal aliens who feel entitled to the American Dream that should be living in a $500,000 home in Southern California

For young people mowing lawns who think the world owes them the right to live in a home

For people who cannot prove they have an income

Exotic Mortgages