Home : Blogs : James Downing - REALTOR®,GRI, ABR - DC Real Estate : DC Real Estate News

We can't just blame Wall Street or the Government...

I am going to write about a very sensitive subject. There are strong opinions on both sides - however I am someplace in the middle. Now this was inspired by someone whom I have the utmost respect for; fellow blogger and Real Estate Broker, Lenn Harley.

"They Bought Homes They Couldn't Afford" Is a phrase we often hear. It is a phrase that, as Lenn says; "sends chills down her spine..." Well I can't (always) agree with that.

People DID buy homes they could not afford and Yes the banks were too greedy, stupid and short-sighted that they let people qualify for way too high of a loan. The banks didn't have very good (if any) checks in place for those Home Buyers who simply LIED about how much they made in income. The so-called "No-Doc" loan; let many people "state" how much they made.

Now SHAME ON THE BANKS for letting such crap happen. But to then call the Home Buyer a Victim - is a bit much. SOME of them KNEW BETTER.

When I purchased my condo in Washington DC; a very well respected loan officer; said - You qualify for "$x". I about fainted. That was WAY more than I wanted; with a payment WAY more that I wanted to pay. Now could I afford it - probably. But I drive a nice car, go on vacation and oh yeah BUY GROCERIES !

Should the bank NOT have offered me so much? Maybe, maybe not. I have excellent credit; have owned and sold homes before even had steady income. But if I accepted such a high amount - I couldn't say I was "A victim"; but rather a FOOL.

When I had a young couple tell me they wanted to buy a HUGE Town home with a zero-down loan; I told them they were foolish. I explained over and over that it was their 1st home, they probably didn't need such a large place as their 1st home, and I cautioned about zero-down loans. One of the buyers was an Accountant. While I doubt he understood the crazy ways the Wall Street folks were "playing games with mortgages" - he did understand the risks associated with this loan. Now they are upside down; can't sell and struggle every month to make the payment. Victims?

There is NO Question that Many Americans are Victims. Those that lost their jobs (and homes) because of the the Recession. Those that were lied to by Lenders and Real Estate agents; who told them, "Not to worry". Those whom could not read the Fine Print - because they don't read English; (now I would never sign something written in French; but hey that's me).

As we sort through this mess - let's just make sure the blame is placed correctly. I suppose we can say - the whole recession would have never happened - nor would homes have lost such huge values; had the 'Game Players' on Wall Street not been playing such a dirty, high-risk game. Nor would we be in this mess had the "Overseers" been "Overseeing" Wall Street and Fannie from pulling one over on us.

However; there are those folks who will always borrow too much; lie about what they make and live life on the Financial Edge. There will always be Investors who risk everything to make a buck; only to lose everything because they were foolish.

I would love to see some real "Bail-Out" money go to Home Owners losing their homes; but let's not make the mistakes we made with AIG. The Fools shouldn't get a dime.

Contact James Downing of the Downing Real Estate Team, if you are selling, buying or have questions!

Office: 202-362-5800 Cell: 703.244.3971

Licensed in Washington DC, Virginia & Maryland.

Coldwell Banker Residential Brokerage - Chevy Chase
5028 Wisconsin Ave NW Suite 100 * Washington DC 20016

Posted by James Downing - REALTOR®,GRI, ABR - DC Real Estate on 04/08/2009 12:49 PM

Comments (49)

lenders, foreclosure

Post is included in group: Washington, DC Mortgage and Real Estate Issues

49 Comments on We can't just blame Wall Street or the Government...

APR

You know, I've been hearing a lot about how the old NINJA loans were fraud. I also seem to remember that they were credit score driven and that the FICO credit score indicated they were a good (i.e., low) risk because of their past history. Why isn't everybody screaming at Fair Issac because their scoring system didn't anticipate the mortgage debacle?

One of my Facebook friends was lamenting the "greed' of one of his real life friends. I don't know the details but I can tell you that when the housing bubble was going full blast most people wanted in at any price. Forget the mortgage mess. What about crazy escalation clauses, no contingency contracts, free "rent backs" for the Seller and all the rest.

People tend to move toward pleasure and away from pain. They saw all their friends, family and co-workers buy houses that appreciated $100,000 in a year (or less). Sure, education, language and the rest played a part. Personal responsibility went out the window and no amount of warnings or education (your accountant story) would do any good.

Oh, yeah....the fools should not get a dime. These are the ones 'playing the role of victim' but KNEW they were gambling.

That's why I say no bailouts for anyone or any company. If there was fraud, lock them up. Let the banks go bankrupt.

A lot of good comments and line of thinking. In the end, we all have to be responsible for our own actions.

The silent majority PAY their bills on time, don't over spend, are modest and have saved. They worked for the companies for years and years, and put in their savings to self-managed 401(k)'s. This is the pity and crying shame. Banks can send their top CFO to LOBBY . . . who do the individuals have to unite them and their cause. Because I'm taking a hit too. A few, the bad apples that spoil it for everyone, are now "victims" and finger pointing and blaming is rampant. I followed the rules. I played by the rules . . . my net worth as taken a tremendous hit, and my interest rates are being margined upwards . . . simply because i AM a good credit risk. I DO pay my bills. We are the people the banks are going after, nickle and diming us. The GOOD FOLKS!

Read this blog "Bank of American Can Just Kiss my Ass" -- I didn't write it, but we can all wish we did.

http://activerain.com/blogsview/1022922/Bank-Of-America-Can-Just-Kiss-My-Ass

Accountability - there is none! That is from the consumer, the bank, the government, the mortgage broker...it does not matter who the party in control is either. We went from a head in the sand party to a don't blame me party and nothing has changed. We had a client that was forced into foreclosure because the mortgage broker told her to use the NINJA loan using money that her son and daughter in law were contributing to living there. When it came time to sell, they were stuck. We consulted with an attorney, and she was advised that she could be pursued for fraud even though the lender put her into this product. The other thing is, all the consumers want to blame those in the industry - where were they when they were selling their homes and pulling in six figures after owning their home for two years? Just like the tech boom and bust in the 90's, we have become asect of get rich quick schemers and over indulge or over exaggerate (current economic swoon/depression) what is really happening. Our foreclosure laws are too lax, our banks are getting inundated with short sales that are not due to real hardship, and our government is telling them it is someone elses fault. That being said...it is too large of a percentage to simply do nothing. I am just amazed at how many people refuse to take responsibility for their mistakes. Remember when it was a hot market and we as agents were being chastised for not listing the property high enough or looked at as a disappointment if the neighbor sold for pennies more?

I agree with some of the posters. No bailouts. This is NOT the first time we have had a massive upside down mess. It happened under Carter and 300 banks went under. Don't remember that mess? We were not news junkies with 24 hr. news then.

It was not the end of the world. Let people take their losses. I bet they won't do it again. Revard success, not failure.

I also had a family member who disreguarded me when I advised against no doc loans etc. He counted in his bonus money from a dotcom. He lost everything. He won't do it again.

They gambled and they lost. Let them suffer the pain. Why should we bail them out!

Bailouts lengthen recessions. That is a proven fact.

Accessing blame is an easy game, and they way out of this cannot make that a part of the solution. It would be impossible to go on a case by case basis, but you are right in that some homeowners and investors depended on a stategy is that there is no way but up in value

Where I blame mortgage companies is from my experience with out of state investors. It is not just the ALT-A and option ARM loans they were doing. I believe many knowingly deceived the investors I was working with. My local companies kept being beaten on rates by some Countrywide originators who were out of state. I finally asked an investor how they could do less down payment and lower interest rates since most are pretty similar company to company. He said that they advised me to book my investor property as a second home. I almost choked. I asked the man how comfortable is was with HUD fraud and did he look good in orange? What do you mean he said? Simple, you sign a document at closing that says this is a second home that you plan to occupy at least 14 days out of the year. That is no difffernet than an investor trying to get an owner loan. It seems he had 6 second homes. He didn't buy from me and good riddance. No commisssion was worth my license. Yeah, there is plenty of blame to go around.

James,

Point well taken!

well it's not my fault, nothing is ever my fault. You know it was the one armed man who did it.

I cringe when I hear no bailouts for anyone.

That assumes everyone was reckless, or foolish, or irresponsible.

Is that possible? I was thinking not.

Situation where I thought the person was not reckless, or foolish, or irresponsible. The person just got caught in the cross fire.

Positive cash flow on rental properties: eight properties owned outright, three rental properties mortgaged, plus mortgage on primary residence. Total face value of debt about 40% of assets. Total periodic debt servicing ($6,000) about 50% of cash flow.

Sufficient income to pay mortgage on primary residence.

No consumer debt, just four mortgages. LIving simply -- no fancy tvs, no flashy cars, no premium cable stations, no fancy cell phones, no fancy restaurants, no exotic vacations -- no vacations, no spa treatments or retail therapy, ...

Sizable cash reserve. And a line of credit tied to the value of one property.

Emergency situations (three, weather related) and not knowing what was going on behind the scenes, the cash reserves were reduced -- thought to be temporary.

Then, several vacancies all at once because tenants unable to pay rent. Not a normal event. Vacancies longer than normal.

And, income flow decreased about 30%.

Suddenly, there is a cash flow crisis, thought to be temporary.

But, because of steeply falling property values (50% plus), and "tight" lending market, the line of credit was no longer available, and no loans available for someone with that many properties -- can't borrow against assets. Secondary market said "No loans for over four properties owned" (not just mortgaged, not just investment, ...)

Property owner unable to pay loans; Lenders won't "help" until loans go into default.

Lenders "give" short-term forbearance, then demands balloon payment at end of forbearance.

Person can resume regular payments, and can, with time, come up with balloon payment -- just not now.

Lender refuses all payments, because borrower can't make balloon payment.

Markets still tight; no way to borrow, and property is not selling. Oh, and if loans might be available, the person's credit has been trashed by the defaults, which that person tried to avoid.

Lenders threatening foreclosure because the person cannot cough up $40,000 in addition to regular payments.

Is this person foolish?

Was this person reckless?

Was this person irresponsible?

I was thinking not. But the line of reasoning reflected in these posts would suggest no mercy for such a person.

Wow, that's harsh. I was thinking they were in the wrong place at the wrong time.

Bingo...Cindy put it short and sweet. " we all have to be responsible for our own actions."

Here is what I tell my children when they point fingers. Point one finger towards the person and three are pointing back at you.

Bettina

While I do not think I personally was being harsh, I do have to point out the word Investor. This means he had an investment, and all forms of investment carry risk. I think his situation is a result of the people we are really discussing - those who did not do it the right way but are the ones we focused on trying to save using the premise that "helping them will stabilize the values". Someone once told me the theory on the lottery and how winners always seem to end up being broke. That is because finance is a learned condition. IF you re-distributed the wealth and gave everyone the same amount of money in their bank accounts, people like Bill Gates, Warren Buffet, and Steve Jobs will still end up earning it all back while others will still end up being poor again. That is basically what we tried to solve the housing problem with - everyone deserves to own their own home right? Unfortunately, some people can not handle home ownership.

I agree with the statement that we all have to be responsible for our own actions (Bettina, #12)

And I agree that the word, Investor, is pertinent. I don't think the guy was looking for a handout. I think he was looking for time to liquidate assests.

It is so true. Let's talk about accountability. Grown adults signed these docs! It is everyone's fault.

However, the only ones that I see having consequences for their actions are the home owners. They are

the ones loosing their homes. Unfortunately, I believe 95% of the mortgage companies and big banks behind

this mess are going to be bailed out.

Every time a post is written about this subject, the sides divide and the fingers get raised. I sensed some trouble late in 2003 and 2004 when there was great flurry of new licensees jumping in to the business. Many set themselves up as mortgage brokers and real estate agents listing and selling, and doing the loan origination. Membership in the associations sky rocketed, real estate services swelled in ranks and many people seemingly benefited from the surge. Lenders were oblivious, appraisers were said to be influenced and breathing was all that was required in the new culture sweeping the country. No one contested it, "it was the market". Sellers enjoyed lots of gain, buyers paid whatever was asked, that "was the market". Where was the protest that people shouldn't take advantage of " the market". Just the opposite occurred. Step up and get your (piece of the American Dream) home was the message.

Lots of people bet on what was as it proved to be , not sustainable. Hardly a voice could be heard saying, out loud anyway ,"stop doing this, stop banking on a future based on hypothetical circumstances that the bubble could grow even bigger ". Why was Wall Street encouraging the investors to buy the bundles of all the the cheap risky loans they themselves encouraged. Where were the naysayers saying this bubble is going to break, don't participate. Where are the real estate agents that said, "I will not be a part of this bubble". Where are the lenders that said, "you can't afford this loan, you shouldn't take this risk". Silent.

So everyone got in on it, from top to bottom and everyone seemed to be actively participating. When the system could not sustain itself further and the bubble started to leak, the doomsday predictors came out in full force and said, " I told you so". All this is history. Before the bubble sprung it's leak, the retail culture also benefited when the homes were turned into ATM machines with all the new found money. What could be better than a 52" flat screen that seemed similar to the giant cinemas. There were plenty ready to stick their fingers in the pie and commerce was booming.

Exactly where in all this momentum were the warnings. Too many people benefited and now the devil has come for his due. But wait.

Shall we also condemn the homeowners that didn't participate. Which ones were they exactly, the lucky ones that sold and bought bigger. Refinanced and took out cash to put in the glamorous new kitchens, took holidays, bought the new cars?Most weren't asking questions as it was time to seize the day.

It just seems to me that finger pointing now is senseless, there may not be enough fingers on anyone's hand for that. What we have is a crisis with a lot of people hurting. Earned or not, they are hurting. Are they guilty of using the system that was put in place so they would? The damage is done. This reminds of me of doctors going into the cancer wards and saying-"you smoked, I don't feel sorry for you that you are dying". That would be unconscionable. Does being right excuse people of being heartless and just dismissing it as though they had no part to play in it. I'm of the thinking that lots of hands would need washed first. Let's pull together and try to solve this big morass and at least be a little compassionate to the human tragedy that has unfolded.

It's not black and white folks. There are all kinds of shades of gray in this mess. Some loan officers made bad loans to folks they knew could not really afford it, some agents sold houses to folks they knew were not going to pay for them, some home owners got in over their heads with no forethought on increasing payments, some investors and builders got burned due to the housing slow down. There are some victims out there, but not everyone who is loosing their home or investment is a victim. The saddest thing I see in this entire situation is people loosing the roof over their head. If you loose a rental property, oh well, but if you loose the roof over the head of your children of course I have compassion for you, no matter how you got in this mess.

I don't think the car companies or consumers should be bailed out, personally. Yes, bad stuff happens to good people. But in a "normal" economy, if I lose my job or my husband, I wouldn't get a bail out. I'd SELL THE HOUSE.

Bottom line is if you cannot afford to live there, you need to get out. Sell it, or do deed in lieu or bankruptcy ...

It's not fair, but you know what? Life's not fair.

Nobody put a gun to someone's head to sign for a house they could barely afford in GOOD times. They took a risk that nothing in their income/situation would change. They rolled the dice, and lost. That sounds cruel.

I am not that cruel. I think there were people who really did set out to sell bad loans to people. They should be prosecuted if you can prove they did such a thing.

But many many people in trouble right now are going through normal life's stuff: job loss, divorce, illness. You need to plan for these things, or at least prepare mentally that they COULD happen. You don't over buy or buy foolishly, or sign for loans that COULD rise in payments when you cannot afford them.

Too many people didn't think these decisions through, which is why they're in this situation now.

Lets be honest here folks. The ONLY people to blame are the people who took loans out they couldnt or dont want to afford. PERIOD

I say dont want to afford anymore because many many many people could afford here payments if they wanted too, but there is no real incentive to want to. NOT when everyone is telling you its not your fault and the govt is bailing everyone out.

In our instant gratification society, where we stand at the microwave and scream hurry up. We want it now.

People new what they were getting into and i have zero sympathy for them. I dont for a minute buy the bull... they were lied to. Even if they were lied too. What did they think they had no payment? of course not maybe they had a low start rate that went up or is going up but thats not what this problem is about.

This all started when prices stopped going up then people who bought with little or many cases no down started walking away, the the house of coards came tumbling. Now no one wantes to make there payments anymore because the value of there home went down.

Zero sympathy!!

OK... Now you may be right in many cases... on the other hand.. there are some home owners that could afford their homes and then lost a job or something along those lines...

Hi James -- I think (worth 25c) that there is a whole lot of blame to go around in most all directions. I bought 4 homes in the greater DC area, 3 appreciated like mad, 2 did fairly well and 1 didn't do so well. I know the DC craze from past homeowner experience. While our market here in Cleveland was never like that, we still have the same issues, and the economy isn't nearly as strong. I've seen a home in DC sell for 600K in 1998 and sell in 2006 for 1.6 million. I'm not quite sure if that 1.6m buyer in 2006 tried to sell now what would happen if he couldn't bring 200-300K to the closing table.

James, I agree with you on many points, I'm sure some did my homes they couldn't afford. But some could and then lost their jobs, no not some many in Michigan. Then "some" had to move to feed their families, then "some" were told not to worry they could refinance in a few years when they got equity.

There is not one reason for all of this except packaging B and C loans with A loans so that everyone had "a right to a house" in America.

Start with the root and then go to the branches and there was all kinds of mistakes made.

I take some umbrage at your blog entry, Jim. Homeowners were the victims in this economic mess. The folks who purchased homes during the halcyon times of rapid appreciation were victims of trust. They trusted their real estate agents, their lenders, and their faith in the U.S. government's regulatory better angels and we all let them down. And don't get me started on home buyers who could hardly speak English let alone read it being assured that everything was ok...sign here.

All of us should take a very good look in the mirror and stop trying to move the blame to the homeowners. The troika of professionals (real estate agents, lenders and government) need to give out with a great big mea culpa and forget trying to pay some kind of shell game with the responsibility nut.

Okay, so if you lose your job, or your spouse, or have a rash of bad luck some other way, what do you do?

Blame the lender? Blame the other guy?

Face the music. If I lost my income, I would need to SELL MY HOUSE.

Why do so many people think they DESERVE some how to keep the house? Job loss or illness or divorce, not my fault. Okay, I will buy that. But if your circumstances change, you must change too. Why MUST you stay in your house? Why must the bank renegotiate your loan?

I am not talking about people who were lied to or tricked. I am talking about people who bought houses, expecting them to rise in value (why? why MUST they increase in value? can't they fall?) and over paid or bought beyond their means.

Are y'all still on this blame game? Don't you think it's time we opened a new chapter and focused on getting qualified buyers into all of the vacant (and soon to be vacant) homes?

Nobody, who commented on this post, is going to unwind the losses homeowners and banks have incurred. Everybody, who commented on this post, can affect change moving forward.

I am afraid to comment on my own post !! You never know when a Post will create such a Frenzy!

Brian - #1 Mortgage Broker - You have said it well.

Moving forward is important. And it is equally important that we all move forward with an understanding of what went wrong so that it doesn't happen again.

And Jim...bravo that your blog started a healthy discussion of this economic mess. Thank you. New chapters can only be written when the old chapter has been completed.

Wow a way to think, sounds like the 70s all over again. If you invest and lose, that the way it is. If you buy a home, rent a house, move in with family whatever and lose your job, again that is life.

Everyone can see a reason to give a bail out and everyone can see a reason to not. We can go back to the beginning of time, should Adam and Eve got a bailout because God kicked them out of the cozy garden because they couldn't follow the rules.

Some will say yes, some will say no. Lets solve it. If you want them bailed out send in all your money to the treasury and put bailout on the envelope.

I don't so leave my money in my pocket and I will not ask for yours regardless of how tough times get.

Great post and points well taken. Accountablity is the key to all involved.

James: Somewhere along the line we lost the idea of personal responsibility. If we just owned up to our own mistakes, we'd all be a little better off! Thanks for the post!

There are several principles here that run into gray. Interesting to read. Thank you to you all for polite posts - unlike the meanness I read on the news posts.

1. Personal Responsibility is always the bottom line. We are responsible for our actions and our responses. That goes for buyers, agents, and lenders. We know if we didn't tell people or if we mislead them. If we were greedy (see #2), or if the buyers were.

2. Greedy people took advantage of uniformed people. That will continue until the end of time. Greedy people take advantage of people.

3. The government is messing with things that they have no business messing in. Past and present.

I am grateful that I live in a community that was somehow spared some of the whacked out loans and weird deals that were out there. I know some of your communities have it far worse in many ways.

Wow, this blog has generated alot of enthusiastic responses. All I can say is we need to teach our kids that for every dollar they borrow for a home they have to PAY IT BACK with interest. Makes sense to me and I don't have a PhD:-)

Congratulations on the feature, James. You stirred up lots of comments. Most are long and well-thought out, not just little quickies for 25 points. I too feel that folks who take on more debt than they can afford are not to be bailed out when things go sour.

You didn't buy the more expensive house even though the mortgage broker said you could. You were too smart! Good blog.

I read about your feature on Twitter and decided to check it out, congrats. There is a lot of blame to go around, lenders, home buyers...I feel bad for the people who had the best of intentions but lost a job or had an illness in the family and just couldn't handle their payments. On the other hand, some people just bought a more expensive home than they should have because they weren't being prudent financially. They made a decision which later turned out to be bad and then pointed the finger. These people need to look in the mirror and hold themselves accountable for being greedy. Nice work on the post Jim.

Well Done, James....BRAVO!

Erica has commented a couple of times about bad things happening to good people.

Absolutely. We agree on that.

Yet, we don't agree on some other points.

Sell. Reasonable in reasonable times. This economic crisis is not a reasonable time. Some people want to sell, but can't find a buyer.

Erica commented (#18) that too many people didn't think this through. I personally know people who are hurting who did think this through, with the best information they had available to them from the industry experts (real estate agents, lenders, appraisers). Turns out the information was faulty. How can you hold someone responsible for not knowing they have been fed misinformation?

Carrying this logic out suggests that we blame the Darfur refugees for their plight, their lack of shelter, food, .... because they chose to live in Darfur. They should have known ...

This is a matter of trust violated.

We, as a community / nation, cannot accommodate so many trying to sell at the same time. It is capsizing our economy, hurting all of us, whether we realize it or not.

Lenders' conduct is not consistent with their words. They say, "We Can Help", but their actions say, "We pushing you to foreclosure; We want our money now, and aren't willing to work with you to get our money over a longer period of time." "We don't care if we screw you, and everyone else; We just want our money."

Lenders are shooting themselves in the foot.

Immediate gratification expectations by the lenders. Absolutely.

Not all borrowers are looking for a handout.

Not all borrowers took out loans with no intention of paying them.

William (comment #16) said it best: finger pointing is senseless. Compassion for the human tragedy is in order.

I think it is only fair to say that the blame is really spread equally out amongst everybody, to a degree. My 1st loan was a no doc loan. WHY? Because we had excellent credit and 20% down. I thought that was what everyone getting a no doc loan had but I guess not.

I met with a potential client yesterday who purchased a home for more than she should have on a 80/20 loan, the worst ever. Now she is behind on both and looking at a home worth maybe 80K as is on about a 97K balance between the two. I doubt she can be helped but she is going to try and I told her that if she tries and fails, then she can sleep a little better at night knowing she tried. Honestly, a buyer will be able to buy her home at a better price once foreclosed than now and with less hassle so where exactly is the incentive to even mess with a short sale?

I know the market is tough all over but here in Oklahoma, things are still really good so there is not any incentive to pursue a short sale and besides, odds are it will fall apart anyway. Lenders will need to step up to the plate if they want our help.

APR

When are we going to get tired of asessing blame?, as if it will fix anything.

Bitching and moaning about poor judgement, is just that.

Nothing we are saying here will fix the plight of one homeowner, words are only words, anyone can speak.

I know we all saw it coming, we all hold ourselves accountable. we all take our responsibility seriously, we have all faced the music, we've never been foolish and We are all Perfect.

Soooo, now that's out of my system, what are we going to do about it?

James,

Stop!!! Lessons learned! Where do we go from here? How do we change the system so that this CANNOT happen ever again.

For a while a few years back I recall every one of my buyers going zero down and stretched to the max. They want a house so bad and that is how they could get it. They were still buying the cheapest homes around at that time.

There are lots of people to blame but what's the use really. It is what it is so let's get on with it and as an individual do the the best we can to help.

Portsmouth NH Real Estate

James:

Well said as always. You are direct, knowledgable, and right on. Great JOB!!!

No one wants to hear it but we are paying the price for a generation of irresponsibility

I think the solution to this is to let it play out. You can't force a flower to bloom, or a storm to brew...

I think the government needs to stop getting involved in trying to make it "not hurt" for too many people and let the cards fall where they may. Walter makes a great point. These buyers came from a generation of irresponsibility. MY GENERATION. I know it well.

I'm not like many from my generation. My parents didn't come to my defense when I was wrong. I got spanked. If I made a bad decision my parents didn't bail me out. I worked as soon as I was able. I paid my own bills starting at 18.

BUT that was not the case for many of my friends. Mom and Dad took care of everything... and I'm sure you wouldn't be surprised to learn that there are more than a few of my peers that still live with their enabling parents because they are nursing addictions... or still don't have stable or permanent income. I'm speaking in generalities, but it's not uncommon.

I'm 32 years old! I've got 4 kids and I'm 7 years into my 30 year mortgage. That's a pretty stark contrast to the majority of my fellow 30-somethings.

I think it would be interesting to see a study done on the age demographic of those who have been or are in foreclosure over the last 5 years. I don't think the numbers would be surprising at all.

It's all about the "Me first & The gimme-gimmes".

The solution to all of this is feeling the pain. Let it happen. There are valuable lessons to be learned from suffering, even when that suffering happens to good people. Sometimes suffering is a measure of someones own strength and there's a whole lot of testing happening in the United States right now.

The best way to keep this from happening ever again is to start by saying "no" to our kids, and teaching them the value of personal responsibility. It's okay to watch like a mother bird from a distance as they learn to fly from the nest. It's not child abuse, it's parenthood.

I love that comment from Julie Ferenzi! She tells it like it is. So many children have been spoiled and over-protected by parents!! Thanks Julie.

There is blame for everyone. Buyers are not fools and most bought over there head. It was just like credit cards. A few years ago I was doing loans as well as real estate (Just Real Estate Now) and I guy I used to work with was into a bad hard money loan. He wanted to refinance again and I looked around for him. What I found was only worse. So I told him not to refinance, but wait 4 months when some credit issues would be a year older and we could improve his credit score somewhat. I really needed the money and could have made a bundle putting him into another hard money loan. He agreed the could go another 4 months and keep up with his payments.

Three months latter I call him about getting to work on the refinance. Well he had gone to another lender and got another hard money loan. I missed out on a huge check I could have used because I told the truth and did the right thing. He died of a stroke a few months latter and his wife lost the house. I educate buyers when I work with them, but ultimately they have to make their own choices.

APR

One of your examples was the buyer was told a loan of XXX - probably wanted a home at that price (or above) - got it - liked it - now can't afford it or doesn't want to afford it because the home lost value. The start of the 'chain of events' is the buyer. They wanted to house - the loan officer got them the house they wanted. End of story for the blame game.

APR

I also enjoy articles like this to talk about the moral quandry and everyones spin on the issue.

Thank you everyone for your commnets. As with so many topics in America; it is interesting to hear how different people think and react to issues in our times.

While we don't always agree; everyone did a pretty good job of expressing their thoughts without too much emotion. Thank you.

Leave a response…

Name:

Email:
(optional)

Comment:

What does the graphic say?