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Mommy and Daddy believed the oldest lie in the book: that they “deserved” to own a house because “everyone deserves a piece of the American Dream.” Do Mommy and Daddy “deserve” to own other things that they can’t afford or aren’t willing to work for such as a Rolls Royce or a mink coat? Of course, most people would think that idea is ludicrous. So, why is a piece of real estate any different? No one “deserves” anything. We deserve only what we work for and earn. In the Y2K world of “stated income loans” (also known as “liar’s loans,”) Mommy and Daddy somehow got the idea that they could afford to make a purchase that they actually couldn’t afford to make. Who put a gun to their heads to take out loans that people knew that they couldn’t afford? Is it the fault of the “greedy” banks that Mommy and Daddy were as greedy as their predators in wanting to buy something they had no ability to afford, and therefore, no right to own? Did Mommy and Daddy ever consider that old-school concept that, when you borrow money, you are expected to pay it back? Should we feel sorry for people like this? I’d tell you kids to use your iPhones to text your friends your new address on Skid Row, but Mommy and Daddy’s cell service was turned off for nonpayment.
What do you guys think? Should people take more responsibility for their loans or is it the bank's reckless lending policy that helped contribute to the 2008 housing bubble?
In comparison, people in China typically put down a 20%+ security deposit, which results in a significantly lower foreclosure rate than the USA. Shanghai recently raised the down payment requirement for a 2nd mortgage to 70%. (Source:Shanghai Raises Home Down-Payment Requirement as Prices Jump - Bloomberg). And there are still a lot of Americans who think they can afford a house with only 0-10% down .
What do you guys think? Should people take more responsibility for their loans or is it the bank's reckless lending policy that helped contribute to the 2008 housing bubble?
In comparison, people in China typically put down a 20%+ security deposit, which results in a significantly lower foreclosure rate than the USA. Shanghai recently raised the down payment requirement for a 2nd mortgage to 70%. (Source:Shanghai Raises Home Down-Payment Requirement as Prices Jump - Bloomberg). And there are still a lot of Americans who think they can afford a house with only 0-10% down .
Yes there are, likely millions of them.
Last edited by North Beach Person; 03-22-2014 at 03:58 PM..
Do YOU believe this? If so, why not just say so, rather than leaving a passive-aggressive smiley face at the end of your post?
I'm not sure why a smiley face is "passive-aggressive", but I don't use them anyway and I tend not to pay attention to them. I can't speak for the OP, but I believe the quote from the blog and I agree with it, except that it does not go far enough because it does not mention the culpability of other groups, as a poster so accurately points out just below:
Quote:
Originally Posted by Pfhtex
Banks, borrowers, and realtors are all somewhat culpable, but each group is not 100% evil.
The cliche of The Mean Old Evil Bank is cute and helps people who want to blame one thing, but it lacks accuracy.
Excellent statement, Pfhtex. There is plenty of guilt to go around.
Banks, borrowers, and realtors are all somewhat culpable, but each group is not 100% evil.
The cliche of The Mean Old Evil Bank is cute and helps people who want to blame one thing, but it lacks accuracy.
This is my belief. Can't place blame on one group alone. All three were responsible in their own way.
But it's easier to blame the banks. After all they are the faceless greedy bastards.
People found it easier to rob the bank with a pen over a sword. Lenders did exactly what regulators and law makers wanted. If you don't like what happened , vote them out.
Not every "foreclosure victim" got what they deserved. Yes, those who got the liar loans all the while knowing that when the huge balloon payment comes due that there was no way they could pay, should never have purchased a house they couldn't afford. What did they think would eventually happen? Oh, I know! They all thought that they would sell the house for a huge profit before the balloon payment hit. Well...so much for that idea!
That said, there are those who were very responsible and purchased a house that they could afford. Then they were hit with job losses. They paid the mortgage until their savings ran out. Maybe, once the job loss hit, they tried to sell the house but had no takers.
As for buying a house with zero down---VA loans work that way. That's how we bought our first house---VA loan, no money down and we only owed the closing costs at settlement.
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You almost answered your own question
