5 Comments so far

1. jjpeter March 15th, 2007 4:17 pm

   This is going to affect most people. What I find puzzling, is that the author does not mention the mail reason the default are occuring. At the teaser rate expires, the rate jumps to prime +, which is whatever the lender now feels he can add on to his high risk loan. A 4.9% rate might jump to 8% or higher, and it beyond the marginal borrowers capability to now pay. Coupled with getting into the top of the market, with all the gains realized already in pricing, and now going down in real value, and its people in a financial vise, and back to the land of being a renter.

   Living beyond ones means is always temporary, United States of America, please take note.

2. ralph 442 March 16th, 2007 3:57 am

   In the late 90’s the inside “smart” money was poised to flee the market just after every Tom, Dick and me had fallen for the “can’t lose” it’s a new economy with infinite potential. They got out and we common folk where advised to just hold on as it would be a temporary dip and soon things would be booming again. I remember one famous quote: “The only mistake you can make in this market is not being in it.” I still have a $3000 annual tax deduction for that folly and for many years to come.

   Recently we have had the same hype happening in the housing market. The mantra was just get in anyway you can. No down, no interest loans, just your signature and a smiling face. The housing market will keep going up and you can sell or refinance before your balloon payment.

   So the smart money (bankers and mortgage industry) sucked out as much money as possible from the working class. Then they sit around and wait for the fire sale and pick up all the burn chips, hang on to them for a while, polish them up and sell for a profit…. Oh, the sweet smell of sucess… and greed!

3. signalfire March 16th, 2007 10:24 am

   It’s far worse than this article portrays. A significant amount of the American economy is based on the housing market. All the real estate professionals, Home Depots, plumbers, electricians, builders, etc and so forth. Even the automotive industry. As sprawl has spread, more people have moved farther and farther from city centers to buy their ‘McMansions’.

   What happens when gas goes to 5 bucks a gallon, as it will sooner or later? Peak oil is NOW. From here on in, it’s less oil, more people warring over it.

   All those houses in the exurbs are gonna be a glut on the market as people can no longer afford to commute. What are they gonna do, turn their 4 bedroom, 5 bathroom houses with granite countertops into rooming houses like my grandmother did during the Depression? And who are they going to rent to? The now unemployed real estate agents and car salesmen?

   This is just the beginning. Oh, and all those home loans? They were sold to China and Japan, who now own our asses, a quarter acre lot at a time….As soon as they get tired of subsidizing our bombing raids and put their money into Euros, our economy is toast. Up to lately, they’ve needed to buy our bonds to get us to continue buying their toasters. With Latin America wising up, and Europe doing well (and not wasting money on killing people) those days are numbered.

   George Bush killed the U.S. but our own greed and ignorance will likely doom a rebirth.

4. carrigan March 16th, 2007 2:30 pm

   solution??

   govt iterference
   Make into law that sub prime lenders may only increase the mortgage rate after 2-3 years to a rate based on borrowers ability to pay. Then people can keep houses and stop a meltdown in the housing market.
   Why? because sub prime lenders were for the most part devious in their lending. It is my understanding that the federal govt encourged these sub prime loans in the first place.

5. bnvinerocivu December 11th, 2007 9:26 pm

   titzehipukozy…

   exxaxusonuko…

Join the discussion:

You must be logged in to post a comment. If you haven't registered yet, click here to register. (It's quick, easy and free. And we won't give your email address to anyone.)