The Great Bubble

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"Buy a house?" Markbaum asked, puzzled.

He started the car, and the Ford Mustang's engine made a low rumble as it slowly accelerated.

"To be precise, we're here to understand the real situation of the mortgage industry. But if you really want to buy, I won't stop you," Liam replied with a grin.

"I want to see what you're up to..." Markbaum muttered to himself. He stepped on the accelerator, and the Mustang roared away.

In less than half an hour, they arrived at the LaSalle community on Roosevelt Avenue. Markbaum parked the car, and the two got out.

"Mr. Baum, let me remind you that today you're my friend and a lawyer. We're here to check out houses, understand?" Liam said.

"Alright, I got it," Markbaum nodded, a bit impatient.

Liam shrugged it off and led the way, the two of them walking toward the sales office.

"Hello, we'd like to see some houses," Liam said as he entered the hall, spotting a blonde woman in a uniform nearby. He walked straight over to her.

"Please follow me, I'm Laura, the real estate agent," the blonde woman smiled professionally and gestured for them to follow.

Liam and Markbaum followed Laura to the sales office, where they got on a small sightseeing bus.

"Are you two looking to buy a house?" Laura asked.

"No, he's the one interested. I'm just here to accompany him," Liam pointed at Markbaum.

Markbaum nodded without saying anything, surveying the area.

The residential area felt deserted. Not only were there few pedestrians, but also few cars. The lawns in front of several houses were overgrown with weeds, clearly unattended for a long time.

"Do you have children? This place is very close to Kress Private Middle School. Buying a house here would make it very convenient for your kids to go to school," Laura eagerly described the houses, but Liam and Markbaum weren't paying much attention.

"I noticed there don't seem to be many residents here. Is that right?" Liam asked.

"Well, many people have moved out, but it's nothing serious. The mortgage market is just in a small slump," Laura said lightly. Then she pointed to a house on their left, where a man was mowing the lawn. "When that house was first built, I sold it for $250,000. Two years later, it went up to $330,000. A year and a half ago, it was $380,000. Last year, this couple bought it for $420,000. Now they're willing to sell it at the original price. Although they don't want to, they will eventually sell… Hi, Jack!"

She waved to the man, who paused his work to wave back with a smile.

"Why would he sell his house when prices are rising so well?" Markbaum asked.

"Neither he nor his wife has a job now," Laura explained.

"So they're eager to sell, right?" Liam inquired.

"Everyone in this area is desperate to sell. See that house? The owner is even willing to lower the price," Laura said, pointing to another house.

"Isn't there a lot of people trying to sell their homes all at once?" Markbaum said with a frown.

"Who caused the market to drop? But it's only temporary. The housing market won't fall forever. People are just a little panicked..." Laura complained. "Do you like any of the houses?"

Markbaum was about to respond, but Liam pulled on his sleeve. Changing his tone, Markbaum said, "I need to go back and discuss this with my wife… Do you have any mortgage brokers to recommend? I don't have enough cash on hand."

Laura smiled. "Of course, I know a few very reliable mortgage brokers."

She then took them back to the sales office.

In a corner of the hall, a wine cabinet was filled with bottles. A Black man and a white man were drinking and chatting, already a bit drunk.

Laura walked over and introduced Liam and Markbaum to the two men. She touched the white man's exposed chest muscles, gave him a flirtatious look, and left with a smile.

"Looks like she likes you," Liam said with a smirk.

"Of course, that girl has made a lot of money off of me," the white man laughed, his eyes trailing after Laura.

After waiting for a moment and seeing Laura walk away, Liam looked around, took out two thousand dollars from his bag, and handed it to the two men. "We're from an investment company. We're here today to learn about the mortgage industry. We hope you can answer honestly."

The white man's eyes lit up. He put down his glass, took the money, and whistled. "I love this green treasure! No problem, ask anything you want."

"How many loans do you process each month?" Liam asked.

"About sixty," the white man replied.

"And four years ago?"

"Ten, maybe fifteen?" the Black man interjected. "I used to be just a bartender, but now I have my own boat."

"Wow, that sounds great," Liam smiled, then asked, "How many of these are adjustable-rate subprime loans?"

"Almost all of them," said the white man.

"Yeah, around 90%. The commission from mortgages has been huge in recent years. That's how we make our money," the Black man added.

They didn't notice Markbaum's expression turning dark.

An adjustable-rate subprime loan means the initial repayment is at a fixed interest rate, but from a certain point in the contract, the rate increases, making it a very risky loan.

"Have there been cases where mortgage applications have been rejected?" Markbaum asked, unable to hold back.

"Hahaha..."

The two men laughed loudly, almost spilling their drinks.

"How could that happen?" the white man chuckled. "If they're rejected, then I'm in trouble."

"Can a borrower get a loan even if he has no money?" Markbaum's eyes widened.

"Our company offers 'NINJA loans.' You don't need income or work. If you want, you can leave the income section blank," the Black man explained proudly. "The company doesn't care. These people just want a home. Why shouldn't we help them?"

"Your company doesn't verify anything?" Markbaum was incredulous.

The white man smiled and joked, "If I give out a loan on Saturday, it's bought by a big bank on Monday. You get it?"

Markbaum opened his mouth slightly, hesitated for a moment, then said, "Can you wait a moment?"

He stood up and pulled Liam aside, leaving the two brokers to split the cash.

Markbaum paced back and forth, looking a bit frantic, and whispered, "I don't understand. Has the mortgage market become so rotten? Why are they so open about it?"

"Clearly, this isn't a secret in the mortgage industry. It's standard practice. Would you hide what you had for breakfast?" Liam said calmly.

Markbaum shook his head helplessly. He and Liam returned to the two men.

"Do most people understand the risks of this kind of loan?" Markbaum asked.

The Black man's face turned smug. "Most of my clients are immigrants who just want a home. They'll sign anything without asking questions, no understanding of interest rates… they're just a bunch of fools."

"Are your clients also immigrants?" Markbaum turned to the white man.

"The immigrant's credit rating is too high for him," the Black man laughed.

The white man grinned smugly, swirling his wine glass. "I only care about my returns. If I sign a fixed-rate loan, I get $2,000. If I sign an adjustable-rate subprime loan, I make $10,000! If those teenagers don't take out loans, I can't drive a Mercedes. They have the worst credit ratings, but they have money for down payments. Plus, each one has bought more than one house."

"Don't they know they'll pay more for adjustable-rate subprime loans? After the interest rate period ends, the monthly payment could double or triple!" Markbaum exclaimed.

The white man laughed, "Man, are you kidding? Those dumb, big-breasted chicks don't even know what an adjustable rate loan is. They think it means they can choose their own rate."

"Dammit!" Markbaum leaned back and muttered under his breath.

"What did you say?" the white man asked, frowning.

"He said he appreciated the information. We have other things to do, so we'll leave now," Liam said, smiling as he pulled Markbaum out of the hall.

Outside, looking at the run-down residential area, Markbaum growled, "These guys are criminals! They're creating a bubble. The real estate market here is going to crash because of them!"

"Mr. Baum, do you agree with me now?" Liam said calmly.

Markbaum glanced at him, "Maybe these two scammers are just isolated cases."

"You can send people to different parts of the U.S. to investigate and see if the situation is the same. In Los Angeles, New York, Miami, and San Francisco, these scenes play out daily. Banks lend huge sums to defaulters and undocumented immigrants, then package these loans into securities and put them on the market, giving them an 'A' rating to attract hedge funds. But in reality, these bonds are just junk!" Liam explained.

Markbaum kicked a can at his feet and cursed, "Damn, these bastards!"

He walked toward the parking lot angrily, Liam following behind.

The two got into the Mustang. Liam opened his briefcase, took out a thick stack of documents, handed it to Markbaum, and said, "I've been studying the U.S. housing price

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Note: This novel as you see I changed the name and nationality, as such is more complicated translate it I hope you support.