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

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