Speaking of failing banks…
WaMu’s shares have fallen about 85% in the past year, and analysts say its financial position is among the worst of any major U.S. financial institution. WaMu has large holdings of mortgages made in regions where house prices have fallen sharply. More than $50 billion of its holdings are option adjustable-rate mortgages, a kind of loan where borrowers have the option of making a minimum payment that may not even cover the interest due.
Yikes!
Home prices are becoming quite attractive in many areas of metro Phoenix. But if it turns out that a lot of potential buyers can’t find anyone to loan them any money…