Quote:
Originally Posted by graciegirl
No. This is economics pure and simple pitted against a very unfortunate but misplaced sympathy to granting loans to people who could not, would not, should not, can not and did not afford them.
When most of us were buying our first home, you HAD to have 20% down in your hand and it had to be your money, not given to you or borrowed before you could present yourself at a bank or lending institution to borrow money for a home. You then had to show that you had paid your bills on time and had little if any outstanding debt.
You didn't just stand there and say " I want a house like other people, loan me money."
That is where the government stepped in and made it possible to grant loans to people who had lack of funds, no down payment and who were then allowed to buy homes that were too expensive.
They moved into the neighborhoods all over this country and failed to meet their financial responsibilities and walked away from them and devalued every home in this country for the rest of us who had been careful and sacrificed and responsible.
Now those will say that these people lost their jobs, they had illness, they lacked ability to do this or that, but responsible people buy less than they can afford, have a contingency plan like savings to weather a not too big financial storm and don't feather the nest they couldn't afford with stuff they couldn't afford and drive two cars they couldn't afford. etc. etc. etc.
There are exceptions to every rule but the mess was caused mostly by the government enabling people to overstep their ability to pay for the home they "wanted".
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It IS greed Gracie, the banks knew they could make money ORIGINATING and then selling mortgages to investors. With the government they have in their pocket, they expanded the pool of homeowners to cover just about anyone. Remember the NINJA loans? (No Income No Job or Assets) "Their" government guaranteed the mortgages giving them a AAA rating and relieving the banks from responsibility for them. The government (Fed) is now spending $45 billion every month buying the worthless mortgages from the banks at 100 cents on the dollar. The banks win and "we" lose. The appearance of stupidity and ineptitude are just that...appearances. They KNOW what they're doing...oh how they know what they're doing...