I've seen this happening in my own neighborhood. In the past 8 years, home values have more than DOUBLED over what I paid for my house. My neighbors drive very expensive, new cars, they are living in homes that their mortgages are $270K and up for, and I wonder how they can possibly make ends meet.

I drive a crappy beater car (paid for) and owe about 1/3 of what my home is worth on the mortgage because I got a 10 year loan, versus 30. If I had to, as a single mom, I've allowed myself plenty of wiggle room. I could sell it for significantly less than I paid for it and still make plenty of profit. And, if I had to, I could extend the mortgage for a longer period of time. My goal was to have the house paid off by the time my kids went to college. It will be close, but I'll make it.

I really don't know why people feel like they NEED so much to get by. I don't get it. Apparently, I wasn't bitten by the materialistic bug.

__________________
I gave myself to Jesus, but now he never calls.

You gotta thank the Lord for a proper up-bringing. I keep thanking my parents for beating some sense in me at a young age.

__________________
ABoyNamedSue - Speaking of Crestwoods posts - And then there'll be some link to some page, written in hindu or something, talking about sherpas and A&W root beer, and how George Bush is to blame for some Jewish neo-nazi death camp, run by Elvis Presley, on the far side of the moon that's been busted for killing kittens or something

It doesn't really matter. People were all thinking they could flip houses and make money. The problem was few saw the decline coming and those that did didn't tell anyone.

But that's economics for you. Supply and demand. The DIYer's of America all thought that they could get a deal, make a bundle and move on. Or the person making $12 an hour thought he could afford a 500K house. Simple stupidity. People and banks were making loans based on monthly payments rather than debt to income ratios. So we screwed ourselves, and now we want to blame someone else. Typical.

__________________
Those who cannot think or take responsibility for themselves need, and clamor for, a leader.

But "W" is and was on the side of the banks, can you rationalize our obscene war debt?

What does that have to do with the Housing Crises? Did we loan a bunch of money to Islamofacists then blow up their houses?

Prescription
Reality bringing
Overdose of
Zany
Anti-Bush
Comments

__________________
ABoyNamedSue - Speaking of Crestwoods posts - And then there'll be some link to some page, written in hindu or something, talking about sherpas and A&W root beer, and how George Bush is to blame for some Jewish neo-nazi death camp, run by Elvis Presley, on the far side of the moon that's been busted for killing kittens or something

Oh please. Responsible people wouldn't have gotten a 5/1 ARM based on the LIBOR either. Fact is, when all is said and done, the government should never have to bail any one out. The individual should bail themselves out. Instead of making excuses and pointing the finger, the individual should buck up, take accountability and realize they made a bad decision.

The housing crisis has nothing to do with Iraq or the war debt. And personally, I feel every penny we spend on Iraq is absolutely justified. And in fact I would want more. But that's just me.

__________________
Those who cannot think or take responsibility for themselves need, and clamor for, a leader.

You act as though there is no consequence to the banks for people defaulting on their loans. You're forgetting of course that the bank that made the loan, paid the full cost of that loan to whoever was selling it minus whatever was left on their loan due to the mortgage company that holds the title. Banks DON'T WANT YOU TO DEFAULT ON A LOAN! It's money lost for them too. Foreclosure is expensive, and they run the risk of not recouping the cost of the loan when that happens. When you default on a loan, the bank has to absorb the cost of your mistake.

And what about the other people who have had their homes foreclosed on prior to this? In the 200 plus years of buying and selling land and homes in this country? Should the government pay for them too? The only difference between today and yesterday, is that people back then didn't whine about their misfortune--they tucked their chin, and got on with their lives.

In the end, it's your responsibility. You chose to take out the loan. No one forced you. No one swindled you into it. Take a little personal responsibility, learn from your mistake and move on.

I am not disagreeing with you. But I am saying that the banks should have been perhaps a bit more circumspect in who they loaned to and what product they were using. It is an amalgamation of both party's greed and desire that led us here. I absolutely agree that in the end the individual should have made a smarter decision but the banks should have too. To blame only the individual is to negate the fact that you did have some predatory lenders looking to sell loans that were risky at their inception. A 5/1 ARM based on the LIBOR is intrinsically unsafe and was a product that was offered to me by a mortgage broker. I had the good sense to refuse, but not everyone is as smart as me (just kidding, I'm stupid...) Yes the individual should have been better educated, more prepared, less naive, whatever. But the banks do share in some of the blame. of course the banks don't want you to default but, as I cited in my earlier post, they aren't making it easy for the average schmo to get themselves out of the pickle either.

__________________
Those who cannot think or take responsibility for themselves need, and clamor for, a leader.

Unless your home is damaged,

__________________
If you want to be respected by others the great thing is to respect yourself. Only by that, only by self-respect will you compel others to respect you.
- Fyodor Dostoevsky

The first two things a tyrant does are silence dissenting voices and take away the person’s right to bear arms. There is a reason why the founders made them our first two amendments. - unknown poster

Not really sure how to connect the dots between this and me stating that economics in general are cyclical.

__________________
"Those who stand for nothing fall for anything. " - Alexander Hamilton