Mortgage meltdown

Via Atrios, the blogging superman who keeps it going even while apparently on vacation, we learn of a good old fashioned bank run:

Anxious customers jammed the phone lines and website of Countrywide Bank and crowded its branch offices to pull out their savings because of concerns about the financial problems of the mortgage lender that owns the bank.

Countrywide Financial Corp., the biggest home-loan company in the nation, sought Thursday to assure depositors and the financial industry that both it and its bank were fiscally stable. And federal regulators said they weren’t alarmed by the volume of withdrawals from the bank.

The mortgage lender said it would further tighten its loan standards and make fewer large mortgages. Those moves could make it harder to get a home loan and further depress the housing market in California and other states.

The rush to withdraw money — by depositors that included a former Los Angeles Kings star hockey player and an executive of a rival home-loan company — came a day after fears arose that Countrywide Financial could file for bankruptcy protection because of a worsening credit crunch stemming from the sub-prime mortgage meltdown.

This relates to the very last panel in this cartoon from last March, the tiny “afterthought” panel. In the penultimate panel, when Sparky learns that his mortgage payment is about to skyrocket, he says, “You’d think I would have anticipated this moment.” This was my little way of acknowledging the fact that — while it served the purposes of the cartoon — it really wasn’t in character for Sparky to be caught off guard like that. Then, in the very last panel, the predatory lender echoes the same sentiment, and to some extent that’s the real punchline of the cartoon — what did these people think was going to happen, when they based their entire business model on these predatory loans that would clearly drive a lot of their customers into default? You’d think they would have anticipated this moment …