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I think the day of the $250,000 two BR "starter" is dead and gone.
What are you talking about? You can get a starter home for well under $250,000 in most areas of the country. Its only in some bubble areas where it becomes difficult. Although the house next to my grandmas in Los Angeles just sold for $240k, its an 50's built 2-bedroom on a decent sized plot of land. Fairly decent neighborhood too.
No, Wall-street is filled with greedy/lazy rent seekers. But again, it takes two to tango. If your "average American" was not so greedy and interested in "get rich quick" nonsense the problems would have never occurred. Nobody forced people to purchase homes they could not afford, nor did anybody force people to gamble on the housing market.
Its sorta funny though, people like to think of the people on "wall-street" as if they are some alien race. No, they are just like most other people.
The difference is people like investment bankers, stock brokers, real estate agents, and mortgage brokers are professionals with legal and fiduciary responsibility to their clients. They have more knowledge and expertise with financial matters than Joe and Jane six pack, and are supposed to use that knowledge to guide their clients into making sound decisions. Instead they used their knowledge to take advantage of a situation for their own gain. That cost hundreds of thousands of people their homes and the country millions of jobs. The government is supposed to license and regulate these people to keep them from running amok and taking unfair advantage, but thru lobbying, they have bought off the government and repealed laws put in place to protect consumers. The financial industry as a whole from Wall St. to the local real estate agent, have acted unethically. To try to blame their lack of ethics on the consumer who was gullible enough to believe that they could afford to live above their means with the help of financing they did not understand, is a clear denial of the responsibility of the government and the financial professionals.
The difference is people like investment bankers, stock brokers, real estate agents, and mortgage brokers are professionals with legal and fiduciary responsibility to their clients. They have more knowledge and expertise with financial matters than Joe and Jane six pack, and are supposed to use that knowledge to guide their clients into making sound decisions. Instead they used their knowledge to take advantage of a situation for their own gain. That cost hundreds of thousands of people their homes and the country millions of jobs. The government is supposed to license and regulate these people to keep them from running amok and taking unfair advantage, but thru lobbying, they have bought off the government and repealed laws put in place to protect consumers. The financial industry as a whole from Wall St. to the local real estate agent, have acted unethically. To try to blame their lack of ethics on the consumer who was gullible enough to believe that they could afford to live above their means with the help of financing they did not understand, is a clear denial of the responsibility of the government and the financial professionals.
I usually agree with everything you say and enjoy your posts, but I'm going to have to disagree with you here. Ultimately, it is 100% up to the consumer to do their own homework when they buy something.....ANYTHING. If they don't understand something, they need to research it until they do understand it. Taking the financial advice of a mortgage lender, mortgage brokers, buyers agent, real estate agent, etc. Is just plain dumb. Their jobs are to give loans and sell houses. It would be like asking a USED car salesman.. is this a good car? Do you think I can afford the monthly note? His response? It's an outstanding car, and I don't think you would have any problems affording this.
When something sounds too good to be true, it probably is. Have you ever heard that line? Its not just a "line", its something you can bank on.
Consumers acted irresponsibly and GREEDY and put themselves in the jam they were/are in. They gambled and lost. My wife and I actually looked at houses during those times and heard all the dumb ideas, like low rate arms, and interest only loans, etc. We thought to ourselves, how desperate are people going to get to get into these WAY over priced homes? If they can barely afford the monthly note now, what will they do when the arms mature, etc? That is BASIC.. VERY BASIC THINKING. These people were not tricked, they were GREEDY. They didn't care about when the loans matured etc, heck in 5 years their house would probably be worth 100k more right? WRONG.
Why didn't these people think like us? GREED got in the way. Screw them, they help put us in this mess and because of them, responsible buyers will have to suffer or possibly lose their homes as a result of this recession.
I will agree that the investment bankers, stock brokers, RE agents, etc. acted very irresponsible and played their role as well. They acted with the same greed the homeowners did. However, ULTIMATELY, its the homeowners who made bad decisions and did not do their homework. You know, the ones who have walked right out of their homes with only a slap on the wrist 7 year credit ding?
I usually agree with everything you say and enjoy your posts, but I'm going to have to disagree with you here. Ultimately, it is 100% up to the consumer to do their own homework when they buy something.....ANYTHING. If they don't understand something, they need to research it until they do understand it. Taking the financial advice of a mortgage lender, mortgage brokers, buyers agent, real estate agent, etc. Is just plain dumb. Their jobs are to give loans and sell houses. It would be like asking a USED car salesman.. is this a good car? Do you think I can afford the monthly note? His response? It's an outstanding car, and I don't think you would have any problems affording this.
When something sounds too good to be true, it probably is. Have you ever heard that line? Its not just a "line", its something you can bank on.
Consumers acted irresponsibly and GREEDY and put themselves in the jam they were/are in. They gambled and lost. My wife and I actually looked at houses during those times and heard all the dumb ideas, like low rate arms, and interest only loans, etc. We thought to ourselves, how desperate are people going to get to get into these WAY over priced homes? If they can barely afford the monthly note now, what will they do when the arms mature, etc? That is BASIC.. VERY BASIC THINKING. These people were not tricked, they were GREEDY. They didn't care about when the loans matured etc, heck in 5 years their house would probably be worth 100k more right? WRONG.
Why didn't these people think like us? GREED got in the way. Screw them, they help put us in this mess and because of them, responsible buyers will have to suffer or possibly lose their homes as a result of this recession.
There are millions of people that over eat at fast food restaurants, overspend at shopping malls, drive too fast, date the wrong people, don't floss their teeth frequently enough and myriad other things that GET THEM INTO BAD SITUATION...
I have no sympathy for anyone who bought during the last few years and are now losing their homes. Absolutely none, zero, zilch. It was their decision to buy, they have to live with the consequence. They either didn't do their due diligence prior to making the biggest decision of their lives..due to ignorance, stupidity, callousness, arrogance or a combination of these factors. Making bad decisions has consequences in life. You can't have your cake and eat it as well. If I don't pay my rent I get kicked out, if you don't pay your mortgage guess what... you get unceremoniously kicked out as well, that's how it works!
They made the bad decision now it is time to lose the home and make it available to the responsible person who can truly afford it. For every person who loses, another person gains. These people who are complaining about losing their homes are self-absorbed a-holes who do not realize that their willing participation in the liar loan ponzi scheme has made a mess of the whole thing for the responsilble people.
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Personal responsibility, what a concept...
