By and large these foreclosed upon homeowners couldn’t afford the houses they were buying.
If there is a cause to this mess it’s that houses are too expensive now days for the average folks to move in.
Rising home prices don’t even benefit the people living in them as all they get is more house to pay taxes on.
Why are home prices so high. I would wager that the only party really at fault is government through protecting owls that don’t need protection, environmental regulations and building codes.
The Whistler - 07:03am on 03/04/2008
Certainly this isn’t something we should try to “fix” with crafty policy schemes or the expenditure of large sums of tax dollars.
Amen to that. If you let the parties off the hook this time then what lesson will they take away for the next time?
MikeAdamson - 07:03am on 03/04/2008
TW
I would wager that the only party really at fault is government through protecting owls that don’t need protection, environmental regulations and building codes.
There’s lots of blame to go around. Thismight help.
MikeAdamson - 07:03am on 03/04/2008
A lot of the people who are loosing their homes bought way to much home, and purchased for speculative purposes.
Two years ago a 3 bedroom house in my area could cost $500,000. The price had been driven up by a frenzy of people hoping make a killing in real estate by flipping their house a year later when it went up to $700,000. Now the same houses are going for $250,000.
A lot of the people who are stuck with bad mortgages are people who refinanced when prices were at their peek so they could buy RVs, ATVs, and ski boats. Now they have a garage full of toys and can’t refinance their house into a lower interest rate.
Who’s fault is it if someone decides to make risky real estate investments using bad loans? Who’s fault is it if someone shose to pull equity out of their house for a new sports car and a trip to France?
Not the taxpayers.
Wing Chun Geologist - 08:03am on 03/04/2008
Wing. Correct. They BET on the housing market. Now they are trying to hide behind public opinion. But, all this would not have occurred had it not been for the social democrats with the pen of Jimmy Carter.
A fair number of the smaller places (first round of construction) are in foreclosure. Almost all of those were bought on speculation.
Rodney Graves - 09:03am on 03/04/2008
Bailing these people out is rewarding reckless speculation, ignorance and/or stupidity, which will ensure more in the future.
... But that’s easy for me to say, I bought a house I could afford.
foutsc - 11:03am on 03/04/2008
I bought a house I could afford.
That was dumb. You should have bought a mansion and then insisted that someone else pay your mortgage.
The Whistler - 11:03am on 03/04/2008
Well, they’re bad in that every foreclosure is a case where people “lost a bet” that they could pay a mortgage, to be sure, but just as certainly it would be even worse to solve the problem in the wrong way.
Bike Bubba - 05:03pm on 03/04/2008
True that BB. The other thing that concerns me is the trillion dollar market in derivative products which is based on those defaulting mortgages. Somebody is going to be left holding the bag on those bad bets as well and history says its not the guy who laid the bet.
It’s hard for capitalism to work efficiently when moral hazard is removed from consideration IMO.
By and large these foreclosed upon homeowners couldn’t afford the houses they were buying.
If there is a cause to this mess it’s that houses are too expensive now days for the average folks to move in.
Rising home prices don’t even benefit the people living in them as all they get is more house to pay taxes on.
Why are home prices so high. I would wager that the only party really at fault is government through protecting owls that don’t need protection, environmental regulations and building codes.
Amen to that. If you let the parties off the hook this time then what lesson will they take away for the next time?
TW
There’s lots of blame to go around. Thismight help.
A lot of the people who are loosing their homes bought way to much home, and purchased for speculative purposes.
Two years ago a 3 bedroom house in my area could cost $500,000. The price had been driven up by a frenzy of people hoping make a killing in real estate by flipping their house a year later when it went up to $700,000. Now the same houses are going for $250,000.
A lot of the people who are stuck with bad mortgages are people who refinanced when prices were at their peek so they could buy RVs, ATVs, and ski boats. Now they have a garage full of toys and can’t refinance their house into a lower interest rate.
Who’s fault is it if someone decides to make risky real estate investments using bad loans? Who’s fault is it if someone shose to pull equity out of their house for a new sports car and a trip to France?
Not the taxpayers.
Wing. Correct. They BET on the housing market. Now they are trying to hide behind public opinion. But, all this would not have occurred had it not been for the social democrats with the pen of Jimmy Carter.
Yep.
I live in a brand new neighborhood:
View Larger Map
A fair number of the smaller places (first round of construction) are in foreclosure. Almost all of those were bought on speculation.
Bailing these people out is rewarding reckless speculation, ignorance and/or stupidity, which will ensure more in the future.
... But that’s easy for me to say, I bought a house I could afford.
That was dumb. You should have bought a mansion and then insisted that someone else pay your mortgage.
Well, they’re bad in that every foreclosure is a case where people “lost a bet” that they could pay a mortgage, to be sure, but just as certainly it would be even worse to solve the problem in the wrong way.
True that BB. The other thing that concerns me is the trillion dollar market in derivative products which is based on those defaulting mortgages. Somebody is going to be left holding the bag on those bad bets as well and history says its not the guy who laid the bet.
It’s hard for capitalism to work efficiently when moral hazard is removed from consideration IMO.