Cheeselover, a few points that prob won't bring YOU into touch with reality, but might someone else.

1) Banks can't afford to sit on RE Mortgages for 15 - 30 years; they must, can and do resell them so they can use their money again, at a lower profit (as a percentage of their investment) than a farmer makes selling what he's grown.

2) Because of 1, above, US Banks are at the mercy of Fannie May, who buys the majority of existing mortgages, securitizes them and resells them.

3) Congress pressured Fannie May, in the name of affordable housing, to get the banks to give mortgages to people who couldn't afford them unless the market went up for the whole time they were in the mortgage - leading to the Foreclosure bubble. In '06, over 2/3 of all new mortgages in the US were sub-prime mortgages.A sub-prime mortgage is one where the borrower is a bad risk - in other words, someone who can't really afford the mortgage.

4) Republicans in Congress, not Democrats, began pointing this out in '04. Not strongly enough, and they either didn't trust the public enough, or didn't ytrust the media enough, to try and wake up America, as they should have. But that is a failure to STOP the problem. The Democrats CREATED the problem, and now several million folk have lost a home they bought before they could really afford one THANKS TO THE DEMOCRATIC ACTIONS IN CONGRESS.

By the way, I'm NOT a Democrat or a Republican. Both parties have flaws - but the Democrats policies hurt people more than the Republican's policies do. You don't have to take my word about it - the facts are available, tho you may have to study a little economics to really understand them. I recomend Dr. Milton Friedman.

Friedman is a jerk and his theories are easily and, more importantly, humanely proven wrong. His theories have led to misery on a massive scale. Blindly following Friedman's economic theories have led us to where we are.

Carlos-- Wrong. It was always up to the lender banks to underwrite the risk associated with mortgage lending. Unregulated Wall Street and the too big to fail Banks developed new investment products based on the general concept of mortgage backed securities. The market for these securities grew beyond anyones imagination. When the rich have low tax rates they invest, some would say over speculate. As more and more investor money flooded into the MBS market Wall Street and the Banks actually had to have more product ( mortgage debt ) to meet the demand. Huge mortgage origination firms like Countrywide were encouraged and rewarded for delivering more debt product into this market. Investor demand drove down underwriting standards, Wall Street deluded the rated mortgage pools with lower credit deals, mixing good quality loans with poor quality loans. Derivitives and Credit Default Swaps added to the mayhem. Eventually this house of cards came tumbling down because the Banks had hypothocated these loan pools ten times over. Sub prime mortgage defaults which in a less greedy world would have been relatively innocuous, suddenly poisoned the entire loan pool, and the banks not only had bad loans but alsoi insurance policies against default that also came due. Blaming home owner/borrowers is ridiculous. There was an army of so called loan brokers out there pushing more and more exotic loan products and actually intimidating people into high levels of debt, insinuating that you where stupid if you didn't use leverage to make your fortune in the housing market.

Right-- Merc , as we all know that banks are playing games with peoples having little know how about the mortgage. thay pretend to have no other charges associated with it but its actually not the case so what Carlos said was one side of the picture.

They are not paying thier because they can't find a job with high enough wages to pay them. Try to pay taxes on 7.80 an hour and still eat.

Hey Joanne-

I agree with you, but the problem today isn't people walking away from their mortgages or refusing to pay their taxes. The problem now is people losing their houses because they have lost their job, or they (or a family member) have suffered a serious illness that their healthcare doesn't cover fully, or they don't have healthcare at all, because they couldn't afford it.

Today's victims are collateral damage, innocent bystanders so to speak who have been caught up in events beyond their control.

Not to worry-the bottom props up the top and they too will fall and they lack the basic skills to perform meaningful work. It will be fun to watch them lose all to Goldman Sachs!

NOBODY making minimum wage is paying on a mortgage to begin with.

middleroader12-

It's not that simple Middle. The majority of forclosures now are the result of the owner losing his/her job, and/or a healthcare issue. It doesn't matter if you own your house, if you have lost your income and/or if you suffer a serious illness or injury and you can't cover the healthcare costs, you are going to lose your house. And as I said, those are the main reasons for foreclosures today.

Hey, I did it right, and so far, I'm okay. I bought my house 13 years ago, and I've got seven years left on my mortgage. I paid 1/3 down, and my house was well within the amount someone in my family's income bracket can afford. We even add a little extra to our monthly payments to knock down the principle a bit and we hope to finish up a year early.

A few years back, my wife went on disability. It was a hit, but we had planned ahead for this type of thing, and I'm the primary breadwinner anyway. I have a good job, and good healthcare. W don't carry a balance on our cards, and we have only one, very modest car payment. So, I would say that even with my wife on disability, our finantial situation is more stable than most.

Now, I don't think I'm going to be laid off, but who can say in this economic environment. If I do get laid off, we might very well be toast. It would be touch and go, especially if I am unable to get work after the unemployment runs out, and that's happening all of the time. Also, I'm 60, not the optimal age to find work in an environment sucha as this, All my best laid plans, and a couple hundred thousand dollars worth of equity will fly out the window.

I don't think the old rules of finance apply, at least not at the moment. The economy has done things we haven't seen since the great depression. I agree, a lot of people were stupid and overextended themselves. But most of these folks were culled from the pack a year and a half ago. By contrast, most of the people that are getting hammered today did things right, and then became victims of economic factors that were beyond their control, and beyond anyone's expectations.

Oh, one last thing. I believe it was Wells Fargo that announced today that in fact they had foreclosed on something like 45,000 homes that they should not have this past year--they screwed up the paperwork. That's just one bank.

uh,,,,,,,,,you have a crappy little house that you bought 13 years ago, that will still be a crappy little house in 13 more years from now and will have paid countless repairs, taxes, congratulations

There are people who pay off their homes only to pay property taxes 4 times what the original mortgage was. What are you smoking?

Middleroader, you got it half right. Many of us have been mauled by this economy even though we saved, lived within our means, and stayed clear of the mortgage industry's shenanigans.

I don't own a house, but I pay my rent in full, on time, every month. Yet, I am moving for the second time in a year, because some a$$hole landlord decided to pocket the rent instead of paying the mortgage. I blame scumbags like these for the financial meltdown.

Tanya, please see my post above. The people losing their houses today are the victims of job loss and/or health issues.

One thing I didn't mention. My friend was laid off a year ago last January. He was blind-sided. His wife was laid off last spring. A month ago, he finally got a job and beat foreclosure by a month. He was out of work for 18-months. His wife is still out. It ate up all of his savings, his two kids' college funds, and now he's in up to his neck. If he gets laid off again, which can certainly happen in this economy, he's toast.

How many families that you know, could be out of work for 18-months and still not lose their house?

Sub-primes had nothing to do with the mortgage meltdown. Can you say derivatives? I think ya can. Now go look it up on the Internet!

mandt,

That is unfortunate. But, life is not fair. Sometimes bad things happen to good people.

i think your type and many other americans are the problem with this country along with white supremisists and gangs. i myself am payng for my houses mortgage and its probably a better house than yours and yet im treated in the street like a loser mexican just because the way i look. so i think untill your kind can get along with my kind we can further prevent future generations from making the same mistakes.

Actually Obvious, you are partly right. I have no cash. What I do have however, is a paid off 5 bedroom, 3 bath double wide on 2 acres of land. It is paid off because of several factors.

First, we blessed by our almighty Lord.

Second, when we sold our farm in Arizona (after giving my ex-wife half the money) we used what proceeds we had left to buy our home cash, pay for the moving expenses across to South Carolina, we paid for a used vehicle which we still have with almost 227,000 miles on it and we paid for a small vending business. When the business failed about 2 years ago we still had everything and no opportunity for anyone to take from us.

How did we get the farm? We worked hard and saved up enough money to buy 20 acres of plain desert land cash. We paid for a well. My eldest daughter (she was about 14 at the time) and I dug a 330 foot trench for the electric and telephone lines and had then inspected before we covered them. My friend and I put the septic system in ourselves and had it inspected before we covered it. We paid cash for a 29 year old mobile home. It was a terrible thing but we were blessed to have it. It kept the sun off of us in the summer and kept us almost warm in the winter. It kept us dry during monsoon season. We used a wood burning stove to keep warm and dealt with the summer heat instead of running air conditioning.

Oh yes, and we raised much of our own food. We raised and killed our own pigs, chickens, ducks and goats. We went fishing and caught fish to eat as well. We had our own garden.

We raise much of our own food now as well. Our youngest child is 7 and she has been helping my slaughter our animals for about 4 years now.

Third and finally, my parents raised us up to know responsibility and the importance of a strong work ethic. What many today refer to as "anal retention" I still refer to as "attention to detail." It used to be required for a job; now it is to be made fun of. My father went to work every day, regardless of whether his bad back ached him or if he had a headache. If his car broke down he fixed it himself. I am still impressed that my dad rebuilt a motor in our old Ford Falcon station wagon after he got home from work on a Friday and drove it to work on Monday. He did what he had to do and he taught us well. (THANKS DAD.)

For your information, we are not talking about the 1930s here; I am only 50 years old. I grew up on Long Island where most people would not know how to live without every luxury. People panic today if they cannot have satellite TV.

Yes, there have been many times we went without some of the wants in life and there have been times when my children have gone without some of the wants in life, but non of us ever went without the needs in life. We had food, water, clothes, education, Christianity and love. I always told my children that the good thing about living the way we did and do is that if the whole system crashes, we will not have to change our lifestyle very much.

We buy what we can afford when we can afford it and we do not go into debt to live the 21st Century lifestyle.

I wish more people would learn to live like that; the times are coming when we may have no choice.

By the way; the 5/3 I bought was a foreclosure. The original owner thought it was more important to continue paying off his Cadillac instead of his home. I bought it from a flipper for about $50K. I am still doing work on it since the owner (of the Cadillac) did a lot of damage to it when reality hit him.

I am not bragging; I am actually blessed for all the reasons I stated above.

I thought my husband and I were the only ones who lived this way. We too live on a small farm (25 acres) with a crappy singlewide on it. We pay everything in cash no credit. Our land is paid for. We are building a new home with cash and we should be in it by summer 2011. We built everything ourselves right from the logs which came from our property. We grow our garden and spend hours canning in the fall. We live totally off grid by using solar and wind power. Also we have no need for a brand new vehicle. I couldn't fathom buying a new car and financing it. Our tractor is run off of bio-fuel that the local restaurants give to us. It takes alot of hard work but the piece of mind of not owing the banks anything is priceless. We do not lack for anything.

i think your type and many other americans are the problem with this country along with white supremisists and gangs. i myself am payng for my houses mortgage and its probably a better house than yours and yet im treated in the street like a loser mexican just because the way i look. so i think untill your kind can get along with my kind we can further prevent future generations from making the same mistakes.

What "type" is Obvious? The type that pays his bills and doesn't overspend? How is that a problem?

BTW: You might consider you get treated badly because of your assumptions of other people -- not because of "your kind" -- whatever that "kind" might be.

So fred pretty much capitalized on someone elses misfortune? Yes, hard work, living within your means is great. My family lives that way too. But I am also not foolish enough to think that if I live "right" nothing will ever happen. Not everyone who lost their home lost it due to irresponsibile spending habits. Sometimes all it takes is an accident, an illness, the death of a spouse, a lost job. To put everyone in one group-point a finger and say "see you shouldn't have been so greedy" is unfair.

Gerald, I didn't take advantage of someone's misfortune; they over-extended because they wanted the big home and the Cadillac but couldn't afford both. The established their priorities and chose the Cadillac. They made the choice. They chose to live beyond their means and when the pressure caught up they chose the luxury over the necessity. Someone was going to buy the property; why not someone who worked and saved and didn't live beyond their means? I am not finger pointing at them; I am saying that there is the possibility of doing things in such a way that you don't end up in the situation many others are in.

There are many people who had no way of knowing things would be like they are today, but the people who lost this place did not lose their jobs; they really had the attitude they were entitled to everything while making closer to nothing.

Lastcall- It looks like someone is a little touchy; is it because you can't find a wife or because you are such a bitch your wife has convinced you that you are absolutely worthless?

You don't know me and unless you know my ex-wife and who paid for what, you would be best served to shut up. In fact, if you knew my ex-wife, what type of person she is and who paid for what, you would know that you should shut up.

thats funny, "you don't know me" what episode on Jerry Springer did you star in?

Under Reagan welfare roles increased to an all-time high of 27,000,000,000.00

Under Clinton that was reduced to 17,000,000,000.00

Is that some kind of sucess for Reagan?

I suppose you think the gas shortage occurred under Carter too! uh 1973

Amen, and preach on, because no one who mentions "liberals" or "conservatives" seems to be intelligent anymore. Those people just want to pick a fight.

No one in the private sector was complaining when they were all making money flipping homes, living beyond their means, and trading up for more expensive homes every 3 years. Then the inevitable happened, and they all pointed their fingers at the politicians, bankers, and Wall Street.

Everyone was to blame, public and private. We all need to look in the mirror and stop being in denial, so that this fiasco will never happen again!

Absolutely correct. The greed of human-kind will be it's down bringing. Lets hope people realize it before it is too late.

I blame global warming.

OH Gees What Now,

And lots of ignorance.

Carol,

Me too! But first we must blame Bush!

"White-man's God", You may be smarter than me, but you are also a racist!

mbunch, Shooting the politicians is probably going too far, but in any discussion about the crisis we do all have to work together to prevent something so disastrous from recurring. The very best thing to do is to VOTE the slackers out of office, and begin a highly organized effort to bring about term-limitation legislation. All the things that this country so desperately needs can only be brought about by the efforts of the average citizens. This does mean getting off of the couch, going door to door, organizing the community, staging rallys, giving up a few beers, and number one, TURNING OFF THE FOOTBALL GAME! Each person needs to decide for her/himself what is the most important way to spend their time. So far, we are all aware of what the majority continues to choose. You cannot get something for nothing. Period.

White man? You should wake up and smell the coffee! Only a select few are in the money scene and they make hundreds of millions a year for doing essentially nothing. They may be white but the are also other things. They also promote racism because they benefit by it while the middle class disappears!

Justiceprincess you hit the nail on the head. I have been telling people that we need term limits in congress for years. Most of the people I have talked to about it agree, but think it would be too hard to get them instituted. The whole financial mess, (housing, credit, auto) was brought on by our own need for self gratification. As long as we were getting the best car, the biggest house, or the biggest TV we were happy with the way things were. I remember telling one of my coworkers five years ago the housing market was going to pop. He said no way it would never happen. Guess who was eating humble pie now?

If the banks did not create the loans for fanny and freddie to buy then there would not have been a mess as you say.i guess the answer would to get rid of both.

No "Joanne" sounds like a RESPONSIBLE person. Something that is completely forgotten in our society. Let's just blame everyone else for our own problems. Yeah, I understand, people get themselves in holes or dilema's. BUT when you buy a 500,000 dollar home and can barely afford the freakin shoes on your feet because you strapped yourself to the gills, don't come a crying to everyone. People need to think, what is priority here and be responsible adults.

Robert, finally someone posts that can actually read! These people believe whatever they are told!

me-2013484,

Because we were tired of everyone blaming Bush!

Of course it's not Chris Dodd and Barney Frank's fault. How could it be? They never really did anything any way, they're Democrats, they never do anything wrong.

Seriously, everyone knows that it was really Bush, Cheney and Reagan's fault. It always is. Monica Lewinsky? Why it was Bush/Cheney/Reagan who put her up to it. 9-11, again, Bush/Cheney/Reagan's fault.

There, isn't that easy! Doesn't everyone feel so much better?

OK, Democrats, you can relax now. Obama will fix it, he's the best!!! Remember the "Change", isn't that enough? All we need to do is raise taxes on the rich, they're evil, right? It's there fault too! Hey, raise taxes on everyone, we just need the Government to spend more money. I heard that if the government spent enough money, we all won't have to work anymore!!

Hey, I've got a great idea! Let's pay for health care for everyone! We can have the rich pay for everyone too!

Woo Hoo! What a Great Country!!! Man, that was the best kool-aid I have ever had!!!

Don't want to pay property taxes? Fair enough. Then get out there and clear the road when it snows, bury your trash in your backyard, pay for private schools, hire an armed guard to protect your house instead of the police, whip out your garden hose in the event of a house fire, etc.

not true ! they are tying to get there to set up a goverment to make you pay for when you get there !!!

lol

moving to another planet wont work either --lol only certain thing "death and taxes !!!!! "for life"

cmharmon,

yea, I heard Castro said the Communism was the wrong solution and Europe is having some real problems with Socialism.

Hmmmm, what to do...