Reply #38: The Posts Point Out Exactly What Happened.

[LeFleur1]

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.