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Reply #38: The Posts Point Out Exactly What Happened. [View All]

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LeFleur1 Donating Member (973 posts) Send PM | Profile | Ignore Wed Jul-29-09 09:46 AM
Response to Reply #30
38. The Posts Point Out Exactly What Happened.
Some people were allowed to buy homes at inflated prices that they couldn't afford.

Fault? Lenders (who will suggest buyers lie about income, talk about rising wages (that never happen) and make it all seem so easy, so right, and Buyers (who can't figure out how much they have coming in and how much they spend each month, THEN assess how much they can afford for a house).

Okay, so they get the house they can't afford. They begin to borrow inflated equity to live their lifestyle. They refinance at a lower interest rate, fighting to get the payments within a range that they can pay. Now they borrow more equity to make house payments..???

The house value falls. They now owe more than the house is worth. They can't borrow any more. They are doomed unless they get a better paying job or put the kids to work. Then the greedy guts running the country begin to lay people off. Now there is no hope at all for that buyer...and the lender? The government pays another bank to buy the lender out, or take over the bank/lender.

This equals the mess we have today.
There was just a whole bunch of ...well...stoopidity.
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  -Study Finds Underwater Borrowers Drowned Themselves with Refinancing Liberal_in_LA  Jul-28-09 10:05 PM   #0 
  - Like, duh!  Cronus Protagonist   Jul-28-09 10:07 PM   #1 
  - This is news?  Tangerine LaBamba   Jul-28-09 10:20 PM   #3 
     - Sometimes I wonder how out of touch our countrie's elite really are  Cronus Protagonist   Jul-28-09 10:22 PM   #4 
        - Not just our "elite" -  Tangerine LaBamba   Jul-28-09 10:27 PM   #6 
           - Oooh, here comes Tangerine with her/his big brain. Into ignore you go  Liberal_in_LA   Jul-28-09 10:42 PM   #10 
           - well, it's a good thing someone posted it  shireen   Jul-28-09 11:39 PM   #16 
              - Thanks.  Liberal_in_LA   Jul-29-09 01:34 AM   #21 
  - credit cards may prove to be the biggest villain driving the whole mess.  daninthemoon   Jul-28-09 10:07 PM   #2 
  - a refi is just a credit card with a low interest rate  DBoon   Jul-28-09 10:42 PM   #9 
  - the whole notion of easy credit is driving the whole mess.  Donnachaidh   Jul-29-09 09:41 AM   #35 
  - This is what it sounds like when duhs cry.  chollybocker   Jul-28-09 10:23 PM   #5 
  - In cases I've seen, it was more about the rise in taxes.  bobshin   Jul-28-09 10:30 PM   #7 
  - Wouldn't taxes follow rising property values?  Old and In the Way   Jul-28-09 10:45 PM   #11 
  - Rising property values don't put cash in your pocket  DissedByBush   Jul-28-09 11:34 PM   #15 
     - Not in California. Your taxes are figured from your purchase price  JDPriestly   Jul-29-09 02:13 AM   #24 
     - Unless you refi the first loan, which many did.  Xithras   Jul-29-09 11:53 AM   #39 
     - and many took out home equity loans when their values went up.  Donnachaidh   Jul-29-09 09:43 AM   #36 
  - so what is the cause of the higher property taxes?  OhioBlue   Jul-28-09 10:48 PM   #12 
  - Tax rates are small and never even come close to the  cosmicone   Jul-29-09 12:03 AM   #19 
  - I'm a real Democrat, and I agree.  Robb   Jul-29-09 08:10 AM   #26 
  - Are you talking about taxes rising 300% in Southern California?  JDPriestly   Jul-29-09 02:12 AM   #23 
     - 2% per year is correct - plus people can vote in local assessments  slackmaster   Jul-29-09 08:16 AM   #28 
  - I'm glad the study was done.  barb162   Jul-28-09 10:35 PM   #8 
  - Wages did not rise. Jobs were lost. And people did not want to accept  JDPriestly   Jul-29-09 02:15 AM   #25 
     - Eating out, socializing, getting that operation...  Robb   Jul-29-09 08:11 AM   #27 
        - Like people really need fancy new heart valves....  WriteDown   Jul-29-09 09:19 AM   #32 
  - Gee, it took a "study" to realize this?  PSPS   Jul-28-09 11:21 PM   #13 
  - You forgot to mention that "all this" will cost LESS than renting in a poorer school district.  PassingFair   Jul-29-09 09:13 AM   #31 
  - My stepbrother did this in Socal  Alcibiades   Jul-28-09 11:33 PM   #14 
  - I can top that  grasswire   Jul-28-09 11:59 PM   #17 
  - What a crook! Hope the paper 'outs' her  Liberal_in_LA   Jul-29-09 01:36 AM   #22 
  - My brother did this in Illinois.  murielm99   Jul-29-09 12:39 AM   #20 
  - If only he had sold when it was at 1.5M...  WriteDown   Jul-29-09 09:22 AM   #33 
  - I read that as "underwear borrowers"  diane in sf   Jul-28-09 11:59 PM   #18 
  - My Hanes continue to depreciate  Doctor_J   Jul-29-09 08:21 AM   #29 
  - sort of shoots a big hole in the "through no fault fo their own" nonsense I read here  Lance_Boyle   Jul-29-09 08:59 AM   #30 
  - The Posts Point Out Exactly What Happened.  LeFleur1   Jul-29-09 09:46 AM   #38 
  - A study limited to So Cal owners isn't generalizable because of the peculiar rate of appreciation  Gormy Cuss   Jul-29-09 09:37 AM   #34 
  - yes, and  shanti   Jul-29-09 09:44 AM   #37 

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