renovation

how many people do you know off the top of your head are in a home foreclosure or bankruptcy right now .

for me i know of
2 in a personal bankruptcy
1 in a company bankruptcy
1 about to file for personal bankruptcy
1 in a home foreclosure
this is very sad .

and there are a lot of people who live around me who's homes are up for sale trying to avoid the same fate
i blame a lot of these troubles on lending institutions letting people borrow way to much .with to little to show for repayment.
and car companys are still to lax on loans . even if you just filed bankruptcy. they find a loan for a car for you

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YellowCoffee

There are plenty of people to blame for this. Starting from the regulators in Washington, down to the big banks that finance the lenders, down to the lenders, to the brokers, down to even the borrowers.

Now, one can argue that if Washington placed certain regulations, this would not have happened. However, I ask the question: "Who had the biggest responsibility/liability in all this?"

My opinion is the borrowers. I've said this before and I'll say it again: Borrowers carry much of the blame. This is a big purchase here, the borrower should know if they can afford it or not.

Greed has fueled this problem at every level. It is ultimately the greed of the borrower (wanting to buy more than they can afford) that ultimately sparks this whole chain.

Edit: This is similar to the thread where fat people blame everybody but themselves for their weight problem.

Daedalus

I completely agree. Obviously very controversial, enough so that it'll probably be a frequent topic in the upcoming campaigns. I do not have an ounce of sympathy for people who simply overextended themselves. People who get laid off or are affected by sudden illness deserve sympathy. People who have the same jobs and lifestyle and who suddenly find they can't afford their reset mortgage payment because it's 25% higher after 2 years deserve their reality check. A child needs to be told "no" often, but these are adults. They are responsible for their actions. While I agree that laws need to be changed, anyone who thinks they can own a $500k house for $1200/mo with no money down probably hasn't had much success with their finances in the past.
Those of us who were more responsible watched the speculators and other idiots drive prices beyond reason. We rented or bought far more modest accomodations. We're waiting for prices to become rational again. A little recession would be a relatively quick path back toward balance.
The only tragedy here is that the brokers who made these loans made a ton of money in fees, sold off the paper ASAP, and can better afford to sit back on all the money they made in the past 5 years and enjoy their current or soon-to-be unemployment.

uncledaddy

Agreed, well put.

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Jenny

My dad I believe filed (or should ...) for company bankruptcy, which is what lead to my parents' divorce last month.

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Maarchk

Well thats sad. Did something big cause the bankruptcy?

its sad that people are losing their place to live after having their dreams granted. But I think if they had better educated themselves, they could have said, i dont' need this expensive of a house and found a place that was more affordable.

I could probably buy a million dollar home and eat rice and have no furniture and have a million dollar home... But that seems dumb to me. I'd rather buy a 400k house (in los angeles, thats cheap) and have money for furniture, or emergencies or other issues. Having a house with nothing else to show for it doesn't seem like the ultimate goal.
And if i could only barely afford a 400k house and its that or rent an apartment, then i think an apartment would be it. Home ownership is a huge goal out west, but back east i know people who rent their home for 25 years and never plan on buying. Maybe more people need to adapt that lifestyle.

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Thesifer

I had a friend that filed for Bankruptcy a few years back, and he blamed the Credit Card companies ( 24k in Credit Card Debt or so with little or nothing to show for it ) We got in a pretty big argument about it actually.

I could not believe someone could actually blame someone else because they "Gave them credit."

That to me is the most ignorant thing I have ever heard. People are in control of their OWN finances.

Their are a lot of people that need to wake up and realize that they lead their own life, they set their own path. Society doesn't make many people Poor. People make themselves Poor. If that were not true, you would here no "Rags to riches" stories.

There are also plenty of very wealthy people that end up in the poor house. All their own doing.

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Jenny

He's a large animal vet with his own practice in a small town and things were just bad enough that he kept having to borrow from the bank and they eventually came due. I think. Kind of hard to talk about with them. heh

VTGreg

In the end it is an individual's decision to agree to the terms offered to them, be it a home mortgage, a car loan or a credit card. If they decide to over-extend themselves then it is their fault unless they were somehow deceived.

People need to take responsibility for their actions and stop trying to blame everyone else when they make a bad decision and it comes back to bite them.

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mcs328

Meh...I disagree with all of you. Yes the individual is to blame but having bought and refinanced my condo during the home buying craziness I can see why everything is such a mess. Having never bought a home before, it's like a buying a car for the first time. It was a high pressure environment and you had to have the strength to take a step back and think through it. That's hard when you see the house you want go into a bidding war and suddenly appreciate %5 a month every month. Everyone was pushing interest only and no one was pushing 30 year fixed. Greed on the investors/flippers was bad enough but the real estate agents themselves trying to get bigger cuts and all the middle men trying to push through sales. They didn't care what type of loan you got as long as you bought it and they got their share and they would use everything in the book to make you look like a fool. When I look back I'm glad I took all those math, engineering and scientific classes that made me a step by step analytical person. Otherwise I wouldn't have able to think through all these different scenarios with a clear mind as I'm getting barraged with information. I blame the individual but not as much as the atmosphere of greed and pressure everyone else brought to the table.

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YellowCoffee

This irrational market you are speaking of is not isolated to the housing market in the past couple years. There are irrational markets everywhere: stocks, commodities, current fads (like ps3, wii, or iphone), etc)

The point that I am getting at is that nobody pulls the trigger but the borrower themselves. Why do people feel the need that they HAVE to buy a home? Rent is relatively cheap (in terms of the avg mortgage/rent ratio). Nobody is forcing anybody to buy a home. It is every potential homebuyer's responsibility to know what they can afford. The bottom line is that these borrowers had a choice. It is really not rocket science to determine whether one can afford a home or not. These borrowers made the wrong choice.

Sure, a RE agent may feed the borrower misleading information, but they definitely are not forcing their hand to sign the loan application.

I think this sheds light on the fact that buying a home is definitely a risk. Nobody is 100% secure in their job and in the American economy. These delinquencies/foreclosure statistics just show people's wrecklessness to limit their risk.

Maarchk

So every person who pays too much for a used car shouldn't be blamed for it? I understand what you are saying. but if a house is appreciating 5% a month, then perhaps you shouldn't buy it...

There are high pressure situations everywhere. Drugs, cheating, drinking... but you are the one who makes the choice, and in something so insanely expensive and important like a house... you should always be in control. If you aren't then you should get out.