I'm intrigued by the sudden credit meltdown that is all over the news and the excessive consequences that it may lead to. NPR is talking non-stop about the mortgage market, and how the current environment is not only affecting sub-prime and Alt-A mortgages, but the entire credit industry. Today an analyst claimed circumstances for Countrywide (who originates nearly 1/5 of the mortgages in this country including a mortgage on a duplex I own, lol) are so dire that if liquidity is not restored to the credit market, Countrywide may have to shut down operations within a week, although he claimed the goverment would likely bail them out before allowing the country's largest lender to go under, as that could spark a worldwide sell-off/run on banks.
Now, these claims sound severely overblown to me, but I keep hearing similar Chicken Little warnings over and over. Apparently in the past 3 weeks credit liquidity has dried up to such an extent that it's nearly impossible to get a mortgage (especially a jumbo mortgage) even if you have good credit, since Wall Street won't even touch the mortgage backed securities that banks have been using to finance more mortgages over the past five years. Can anyone here verify this? I just closed on a condo by the beach 5 weeks ago (I used Wells Fargo), and there were little or no signs of stresses on the mortgage industry, from what I could tell. Has everything really gone down the crapper that quickly?
