Collapse of mortgage market leaves many wondering what's next


Mortgage companies filing for bankruptcy.

Home owners forced into foreclosure.

Housing prices no longer growing — or worse, actually declining.

August was a rough month in the national housing market.

The news isn’t all bad, however. Several mortgage brokers I talked with in the past several weeks have said that Bellingham and Whatcom County have not suffered as badly as some areas in the country. While American Home Mortgage filed for bankruptcy and closed its two Bellingham offices, laying off 20 employees in August, those employees were quickly snatched up by IndyMac, a California-based mortgage company and bank that has been rehiring American’s former employees all over the country.

Still, even though local housing prices have remained relatively stable, brokers say it’s been difficult to educate consumers on the differences between fact and fiction. While some homeowners are now facing the consequences of loans they can no longer afford, they still have options available. There is movement on the national level to help some of the millions of homeowners who face losing their houses. There are some creative options that mortgage companies have to offer that are more stable and sustainable than some of the riskier loans made a few years ago.

And for those who have good credit, the bottom line is this may just be a great time to buy a house. Some banks are offering foreclosed houses for less than market value to get bad debt off their books. For a borrower with a decent credit history, interest rates are still good and banks still want to lend money to those with a proven repayment history.

For many others, however, it’s going to be a long haul before this new crisis is over. Low interest rates, risky Wall Street investors and a mortgage industry willing to loan money to those who can’t afford it was a volatile mix that was bound to come back to haunt us. Many are saying the worst is not over — and may not be for years.

Let’s hope this storm passes quicker than that.

— Vanessa Blackburn


G-P tissue mill closure a blow, but not unexpected


While the closure of Georgia-Pacific’s tissue mill may not have been unexpected, it’s still a blow to Bellingham’s economy. The mill’s lease was up in 2008, and no one thought the mill would re-up its lease with the port.

Still, the loss of more than 200 well-paying jobs is never something to rejoice in. But if we can judge from the first round of G-P’s layoffs from 2001’s pulp mill closure, we can be fairly confident that some of those who lose their jobs may be able to join the ranks of local entreprenuers and start their own businesses. A diversified economy is more stable than one that relies on large employers, so perhaps there is a silver lining in this economic cloud.

Let’s continue to support those workers who are now facing the prospect of starting new careers. We wish them luck as they face an uncertain future.

— VB


Off Beat

by Rik Dalvit


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