As the United States mortgage market spirals out of control intelligent minds consider whether the US economy is headed into a recession or a depression. Studies of the 1929 stock market collapse and the depresssion show that the economy functioned and all appeared normal in that regard. Depression studies show, however, that the economy functioned at such a low level that it was like an 8 cylinder engine running on 4 cylinders.

As the mortgage industry sings the blues, Mortgage Blues is receiving emails saying the industry caused their own problems through greed, corruption, and mismanagement. Angry borrowers that did not understand the terms of their loans point fingers at lenders or brokers. Borrowers that did understand the terms of their loan sometimes underestimated how fast their cash from ‘refinance and cash out’ schemes would disappear.

While some say unemployment could reach 40 percent, others compare the evaporation of mortgage funding to being fired. Here today and gone tomorrow. This is not a prime versus subprime issue. People with poor credit are not to blame. Nor will we rule on whether we are headed into a full blown depression. What we do know is that those with money will make money in the future, and those that want to own rental property will benefit. Mortgage lenders say they lose 25 percent if they must foreclose, but might be crying all the way to the bank, so to speak.