Very thoughtful post.  Much food for thought.  

Since it is the home owner who is hurting the most now, the lesses here to be learned is that the home owner should not use their home equity for a cash window.  Imagine the picture now if home owners had just kept a "pat hand" when property values skyrocketed.

They could easily ride this out.  As it is. . . .

I agree Lenn. Two lessons I hope the consumer learns are these: 1) learn to budget. 2) Learn to save.

Not only consumers are to blame, but the banks who gave the loan and the appraiser who backed it. How is business in AZ this first quarter?

Christopher- yes... the banks were making some loans without appraisals. And business in Arizona- it's going really well. Some areas are down while a few areas are performing better than a few months ago.

Chuck- It would be nice if consumers would actually learn to save and live on a budget, but that is not the "American Way" is it?  It is so sad with so many of these people losing their homes, I guess they didn't really realize the implications of getting in over your head or that the interest rates would be changing. Maybe too many live in the present, and don't think about what the future may bring? 

Vickie- I realized I was being un-American :-) I think we've been lulled into believing some things are permanent... it's probably good for us all to have this wake-up call.

It seems like the more credit is given freely, the more it is abused--look at our credit card debt.  One interesting thing to watch will be the consumer credit situation in the U.K. their consumer debt load is higher per capita than ours!