Housing nightmare: Your home is crashing in value, you lost your mortgage broker job, you can't refinance, and you've maxed out your home equity loan

So what is the "Ultimate Great Housing Crash Nightmare Scenario"?

You just know there are a millions and millions of people who made really bad decisions these past few years, who are regretting them now. Kent and Mysti from the other day were a good example, but there's many more out there even worse off than that.

So what's the worst it can be?

My take - anyone who's housing screwed can just walk away. Turn in the keys. Go rent. Find a new job. It's just money, it wasn't your house anyway, and there are more important things in life.

And next time, don't listen to anyone on commission. They'll screw you every time.

Now that the sheeple can't fund their lavish lifestyles with cash-out mortgage refi's anymore, what will they do?

1) Spend less

2) Try to earn more

3) Keep spending like there's no tomorrow until someone cuts them off, going deeper and deeper into debt to buy crap they don't need and can't afford

Someone tell me the difference between corrupt mortgage brokers and crack dealers

And then tell me the difference between cash-out refi overspending Desperate Homedebtor junkies and crack cocaine users...

Mortgage brokers cashed in on U.S. housing bounty

LOS ANGELES (Reuters) - Money may not grow on trees but for a while it seemed to grow on houses, and Colleen Moorhead knew exactly where to turn when she needed to harvest some cash.

With a few phone calls, broker Joyce DeAngelo could put Moorhead and her husband into a new mortgage and cut them a check. They used more than $100,000 in cash they netted from the refinancing for living expenses and renovations.

Between 2001 and 2006, the Moorheads refinanced their three-bedroom San Diego home at least nine times, county records show.

But mortgage broker DeAngelo didn't work for free. Each new loan carried up to $13,000 in fees, along with prepayment penalties, and the Moorheads fell deeper in debt.

A marginal presence in the industry 20 years ago, mortgage brokers have become the face of the $10 trillion home-loan industry, the single point of contact between a sophisticated financial world and borrowers committing to spend hundreds of thousands of dollars to buy a home. Brokers often present themselves as disinterested parties, but the industry feeds on fees from lenders and bonuses when they complete a deal.

Moorhead and her husband now owe $603,000, up from $196,000 when they started, and more than $10,000 over what their house is worth, according to one online estimate. They're likely to lose it soon if they can't somehow make payments greater than their monthly income. Their broker, DeAngelo, said she tried to save them from financial disaster, but her client kept wanting to refinance.

"I told her every time that she can't keep doing this, she's going to lose her house," DeAngelo said, adding that she gave Moorhead tips on straightening up her finances that were mostly ignored. "She has no one else to blame."

As the real estate boom of the last half-decade turns to bust, homeowners like Moorhead say they feel betrayed by brokers who profited from bad advice and saddled them with loans they couldn't afford.

"It seemed like she was a gift from God or something," Moorhead said. "But she's a wolf in sheep's clothing."

FLASH: GM runs out of gas, blames housing crash

I guess the fact that GM makes overpriced gas guzzling crappy cars nobody wants is just a side note.

Seriously, for a company this screwed and mismanaged (a car company that owns subprime loans!), I don't know how they can avoid bankruptcy. And the fact that (as HP predicted) the housing crash helped kill the US automotive industry is mind boggling.

For GM, all that cash-out refi loot is gone, never to return. I'd guess HELOC money bought half the new cars purchased these past few years (anyone know the #?). And how many trucks were purchased by people in the homebuilding profession? Those days are over...

Had enough? Here's more... The yen is undervalued. Toyota is kicking their behind. Their pension situation is a time bomb. Their cars are crap. Their workers make a hundred times someone in China would require. They still own 49% of subprime cancer GMAC. And now desperate homedebtors are flooding the used car market with inventory in an attempt to raise cash.

And yes, I'm short GM via put options at time of writing...

Mortgage 'meltdown' hits auto sales: GM's Lutz - Vice chairman sees entire sector hit by problems in home financing market, truck sales to suffer.

LOUISVILLE, Ky. (Reuters) -- The crisis in the U.S. mortgage market has hurt U.S. auto sales this month, General Motors Corp. Vice Chairman Bob Lutz said Monday.

"The market as a whole has been a little weakish. That has come as a result of the housing market problems and the mortgage industry meltdown," Lutz told Reuters. "A lot of people are finding themselves in a position of reduced affordability and that has had an impact, not just on us, but across the industry."