“In an effort to halt what one official called ‘an investment world version of a run on the bank,’ state officials froze withdrawals Thursday from a $27 billion investment fund that local governments drained by almost half during the past two weeks.” (bold type by me for emphasis)
“‘It is certainly unprecedented, and there is a nervousness out there that we’ve never seen before,’ Broward County Commissioner John Rodstrom said.”
This is nuts. What say you King County? Did I not read a few weeks ago about some of the investments King Co. made were possibly suspect and tied to mortgage securities?
The mortgage securities problems are reaching out and touching everyone. What happens to government municipalities that go broke? What happens to these municipalities when those folks (and there are many) in suspect loans that have no “escrow reserve acct.” do not pay property taxes. Traditional mortgages have “escrow accounts” which are in place to pay property taxes.
The Mortgage Queen Spider has evidently spun her web much more broadly and intricately than anticipated—many more objects are getting caught. Perhaps the Mortgage Queen Spider likes warmer climates, thus sparing Seattle and vicinity. Time will tell us, I suppose.
Update: This is exactly what I’m talking about regarding property taxes.
“Treasurer’s offices all over the country are bracing for the day when lenders stop paying the taxes on many properties in the worst hit neighborhoods.”