Economy

Thank god my mortgage has a cap of 12%, and I have already begun paying off the principle.

'At some point (sooner, rather than later), there will be a housing-finance-related 'accident,'due to an incendiary combination of housing debt and derivatives. That is what lies ahead. What remains to be seen is exactly when the financial bomb gets detonated.

Meanwhile, though this mess has just started, the end game is (and has been) very predictable, as the story states: 'Some borrowers are opting to sell homes they can no longer afford.' Unfortunately, folks like the accountant from Detroit are going to find that as this occurs, there won't be enough buyers, as many people will need to sell.

The inevitable scenario: 'Some California brokers say they are beginning to see a return of 'short sales'- transactions in which the sales price isn't large enough to cover outstanding loans.''

Money Central