About time...
Wachovia Corp. in June stopped offering option adjustable-rate mortgages, which let borrowers skip part of their payment and add the balance to principal. Chief Executive Officer Robert Steel said today the Charlotte, North Carolina, bank next year will cut $1.5 billion of expenses as it's ``tapping the brakes'' on risk.
Can you say prices need to drop significantly to find equilibrium in the market?
At the July sales rate, it would take 11.2 months to sell all the houses on the market, about twice the supply that reflects a balanced market, according to the agents' group.
Obviously they prices were too high. Eventually market forces. Even government intervention can only delay and exacerbate problems.
Home prices in 20 U.S. metropolitan areas fell in June by 15.9 percent from a year earlier, the most on record, the S&P/Case-Shiller home-price index showed on Aug. 26.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZFgAxUK63y8&refer=home
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