Mortgage brokers New Century Financial and Ameriquest, both based in Orange County, California have cratered spectacularly and have laid off thousands of workers. But the pain goes way beyond just them. Multiple other businesses like car dealers and restaurants are reporting drastically less income, condo prices in the area are down 17% since June, and office vacancy rates will double this year.
“It’s a huge engine that has been shut off,” McDermott said. “I don’t know where the new influx of jobs are if you take the lending market out of the equation.”
So, lots of people who weren’t even involved in subslime mortgages are getting hurt by this latest example of the boom-bust cycle of capitalism.