Don’t panic about the NEW Century news this week.

This was a case of what I have been talking to you about for some time. All those easy to get mortgages just coming due and a lot of those people not being able to make their now doubled payments. This is why I keep on stressing to you to read ALL your paperwork BEFORE you sign.

New Century was/is one of the larger privately owned what we call sub-prime lenders, and their investors( other bankers, private pension plans, people like you with cash to invest) got scared because they were not getting their payments from the bank. So….. They all called their loans at the same time and New Century had to admit that they did not have the necessary money on hand.

Not good. 1st, they are required by law to have a certain level in cash on hand; 2nd, they had not been able to collect their payments in more timely manner from their borrowers who are now shocked that their payments went for example form $1500 to $3000. Who knew that we would not be able to sustain 100% appreciation 3 years in a row? Oh, the shock and surprise. Now the feds step in mainly because of reserve requirements and secondly because this was a publicly traded company. Oooooopps. Don’t worry, all will not collapse. Just most banks will now go back and re-look at some of those loans they recently made with “no documentation” and more shakey appraisals.

Also, this is going to be a great time when I call/email you about investment opportunities, to take advantage of them.

The great news: We will all Live and Prosper


So, now that you have a slightly better understanding of this week’s latest “headline” news give someone you pass and extra smile.

Herm.