A librarian making $50K bought a $550K house and now is suing

[question everything]

her realtor who "induced" her to buy the house?

How can any intelligent person think that such a house is the right one for her?

She is now in foreclosure, of course, and blames everyone else, except herself.

This is not the kind of people who should be helped by the government.

She does not want to leave the house because: "where will I live? in a car?"

No, with a $50K income you should be able to rent something.


The story was on CNN this morning, I don't know if it is available online..

[LostinVA]

1. 50K would rent very little in some areas -- like where I live

[question everything]

3. She is in GA, perhaps Atlanta, not sure.. (nt)

[TomInTib]

2. They're everywhere.

I remember when I used to be keel-hauled here on DU for ridiculing these same type of people.

And I mean tarred-and-feathered, burned at the stake.

[question everything]

28. I have been debating this issue here

On the one hand, we really should not bail out people who should have known better.

On the other hand, having many houses in a neighborhood being vacant, being vandalized for copper tubing, for example, hurt all of us. And it is not just in new developments in the suburbs, but also in the inner cities.

The solution, I suppose, is some kind of a compromise.

Mostly, it is the lenders and, yes, Wall Street that bundled the mortgages and sold them, should be responsible.

[pokercat999]

4. Ya think she could have read a book about it ?

[GreenPartyVoter]

5. Actually in my area your every day regular house goes for almost that much :^(

[bluestateguy]

6. I have no doubt that there are a lot of predatory lenders

We need legislation to rein them in.

But there are also some people who just don't know how to make good decisions with regard to money and investments. To just bail them out without consequence would send the wrong message.

[mrreowwr_kittty]

9. The majority of people who got suckered by these ARMs did not buy too much house

Very often, they were doing refis on an existing house or buying something modest. Predatory mortgage companies targetted minority and military communities. But the MSM focuses on people like this librarian to decrease public approval for helping homeowners. Meanwhile, the banks get a big bailout. If you want to worry about "sending the wrong message", that's where you should really be looking.

[Warpy]

7. I remember the motormouthed mortgage salesmen

when I went househunting 12 years ago. At the time, I thought they were pushing an ARM at me only because I was a woman. It turned out they pushed them at everybody who wasn't putting 40% down on a house. The spiel went "but you can get so much more house for the same money every month!" Yeah, right, the only way I got them to stop talking tommyrot and start talking sense about a 30 year fixed was by gathering all my papers and heading for the door. Literally.

Creative financing was pushed at people and pushed hard. Most people didn't know the difference and what a huge risk they were taking because this stuff is simply not taught anywhere. People are ASSumed to know this stuff, and if they don't, well fools and their money blah blah blah.

I agree she should have read the writing on the wall and found a cheap flat a long time ago. Sometimes it takes more time for reality to sink in to people who have been sold a bill of goods that has nothing to do with it and they don't budge until they're forced to.

While I have little sympathy for people like this librarian ordinarily, I do hope she becomes a part of a large class action suit that will go after all the people who scammed her and thousands (millions?) of other people whose sin was not knowing what nobody ever taught them.

There were a lot of weasels making a lot of money from these people. I want them all to face trial for fraud, at the very least, and to pay restitution that will put them into cheap flats, too.

[Common Sense Party]

51. As for the class action lawsuit...

You're basically saying you want to transfer a whole bunch of wealth from some greedy 'haves' (the unscrupulous lenders) to some other greedy 'haves' (the trial lawyers who file the class action lawsuit).

The average "participant" in a class action suit gets diddly, the lawyers walk away with millions.

[Warpy]

53. The point is to beggar the lawbreakers, IMO

but you're right, the homeowners won't get much, if anything. Oh, maybe a month's rent by the time it gets settled.

The truth is that the greedy bastards defrauded these people by failing to disclose the whole, ugly truth about these loans.

Like I said, I want them to lose their ill gotten gains and end up in the same cheap flats as the people they defrauded.

If a few lawyers are handsomely rewarded along the way, so be it. Sometimes that's just what it takes to punish the guilty.

[mrreowwr_kittty]

8. "This is not the kind of people who should be helped by the government."

You are arguing a strawman. She is NOT the type of person who is going to be helped out. And her lawsuit has nothing to do with plans to help struggling homeowners. What most people who are facing resetting ARMs need is to have the mortgages reset to a manageable rate. They are not looking for handouts so please stop spreading this RW meme. I hear enough of this crap IRL. The people who are getting all the money handed to them to bail their sorry asses out are the bankers who caused this situation in the first place.

[Captain Angry]

10. You'd need to be a finance major to understand the loans that were created.

How many banks never talked about the loan amount, the interest rate, etc? They said this is your minimum payment, can you afford that?

When you have fly-by-night loan companies telling customers that they can refinance next year and use the $50K in appreciation against your original loan, they believe it.

When you go to a doctor, you should expect to be given accurate information.
When you go to a bank, you should expect to be given accurate information.

That's changed. I don't blame the buyer. I blame the liar.

[aspergris]

12. people have a responsibility to do their DD

Banks etc. are SELLING something.

Would you buy something that is 10 times your YEARLY SALARY and engage in a complex contract (a mortgage) without doing extensive DD? Clearly, and sadly, the answer for many is "YES". ANd it is primarily their fault.

[Captain Angry]

14. And who should they go to, if not the financial experts at their bank?

This is my problem. I agree that people should understand more about their finances, and in a big way.

But until the last 10 years, banks wouldn't sell you something you couldn't pay for. That changed, and people didn't realize it.

And would I buy something for 10x my salary, of course not. But when they're handed something that says here is your payment amount, and it looks doable, many do it.

I won't place any blame on the people that were fooled by financial experts in good suits. There are plenty of people who used the pricing and loan system to flip houses, become landlords, etc. THOSE people tried to become financial experts and are going to be crushed.

But the people who didn't understand the process and got help from the people that *should* have said no, you're too risky? I can't be mad at any of them.

[mrreowwr_kittty]

15. Really? You read and understood every one of your mortgage documents?

Pretty impressive since I've seen a Harvard law professor admit on TV that he can't understand most contracts he signs. There's a reason they write them using all that gobbledy-gook. You're not supposed to understand.

[question everything]

30. All you need is the Truth in Lending Document

Several years ago we almost got sucked into one of these "optional interest" - or whatever they called it to refinance. The first document listed the payments as fixed for five years. This one was prepared by the mortgage broker. When we got the final document, the amount varied for each year, and it said that it could vary each month.

We stopped with that process and even complained to the state agency which issued a warning to that brokerage. Since we had to pay for appraisal up front, armed with that warning by the state agency we managed to get the payment back.

[question everything]

29. When we first got married, 30 years ago, and started looking at buying a house

we heard that the "rule of thumb" was that a house should be twice the annual income of a family.

In most cases this is what we did, except when we moved to California and stretched a bit more.

One does not need to be a financial maven to instinctively realize that a $550K is too expensive for that kind of income. I doubt that this was an average priced house.

[FedUpWithIt All]

34. I agree and disagree. I gave up a job as a loan officer because i could not intentionally mislead..

people. That was certainly a requirement of the business.

The ARMs were good programs for a certain type of buyer. Those looking to build up equity fast or sell within a few years had a great opportunity with something like a 1.75% 5 yr ARM. At the lower APR that generally goes with the ARMs and a steady payment equivalent to the going 30 yr fixed rate mortgage would build a nice amount of equity AND allow for an OCCASIONAL lower payment should it become necessary. The problem is that most LAs were selling these mortgages by quoting people the interest only amount. Completely unethical. And still i have a difficult time with the fact that these people bought such a large purchase without even attempting to investigate the promises being made to them. The info on ARMs has been around for a long time and in some detail. A simple amount of research would have shed some light for the potential buyer.

Regardless of where one stands on the debate about who is to blame, we will ALL be feeling the repercussions of this for a long time to come.

[aspergris]

11. it's the "it's everybody's fault but the individual" mentality.

And the blame the corporations mentality.

A house is, for nearly everybody that owns one, the single biggest purchase they will ever make, and by far the most complex financial arrangement they will ever make.

CAVEAT EMPTOR

People have the responsibility to the frigging DD, and take SOME personal responsibility.

Personally, my opinion is that the average person should not buy ANY house that they can't afford to put down at least 20% on.

[mrreowwr_kittty]

16. Gee, I'm so surprised you'd feel that way.

:eyes:

You may be right that people should have 20% to put down but the housing bubble house of the last few years (you know, the one that had been propping up a very tenuous economy post tech bubble) wouldn't have existed without mortgage standards being relaxed.

[aspergris]

23. I agree

and my realtor wanted me to buy a bigger house than *i* thought was prudent.

why?

because he's a salesman on commission

but it's not his choice. it's mine. my responsibility.

people who buy a house for 10X their yearly income especially during a bubble are their own worst enemy

[AllieB]

38. I think Milton Friedman rose from the dead and is posting here.

:eyes:

[glowing]

13. If she is in foreclosure, then one would assume that she has a credit

rating of nothing... and that she probably does not have the score to get an apt.. and probably does not have the money to pay the down payments and deposits..

Also, in this bubble push, people were sold on the home because they would always be able to "sell" or take out another loan or whatever so that they would not lose out.

When I was looking for a home, they really tried to get me to buy something that was $200,000.00 or more. (My husband and I combined are right around $55,000.00 give or take, depending on over-time per year). I knew that I could not afford that with a 30yr fixed mortgage; even trying to swing $160,000.00 was too much. So, I walked away. I finally found a house in the neighborhood I liked that was in foreclosure (and before the banks didn't give money to people like myself) for $130,000.00. (If it wasn't for insurance and property tax that is absolutely outrageous in Florida, I probably would have been able to swing $150,000.00, but knew that the those two other factors were a big deal).

If I hadn't stood my ground and walked away from those in the realator office and the mortgage co's that were pushing that, I'd be in a world of hurt myself right now. They purposely lie. They purposely push the, you are rich in house.. sell in a couple of years or re-finance to lock in your rate. "House wealth is normal and you won't lose"... I'm sorry, but more of these sick son-of-a-guns need to be sued. They lie. They push a sale that they know, financially, that their clients cannot afford. AND dangle wealth in front of someone.. they normally take it.

[question everything]

31. We moved a lot and purchased several houses in several states

but the first two that we bought, we hired an attorney to go over the papers. We just thought that since we did not understand all the fine prints, we needed someone to be on our side. Later, a different state, a different house, the realtor was a bit offended that we would bring an attorney to the process and by then we have earned enough experience to read the fine prints ourselves.

Funny thing, we assumed a mortgage and property taxes had to be in escrow, but the amount that the document stated was not going to be enough. Our realtor told us to leave it alone, and when the bank would realize the mistake we could then renegotiate.

First payment came due, and the bank paid the amount, meaning, we got an interest free "loan" from the bank for six months. When the second payment came due, we got a major bill from them.

I went to the bank, "offended" saying that we were not delinquent. "You are not delinquent, did I say you were delinquent?" the officer quickly responded. "They raised your property taxes," he said. "NO, they did not," I showed him. And then he realized that it was the bank's mistake that there were not enough reserve.

And then I hit: how about if I pay you now what is short and you let us be responsible for paying our property taxes, I asked, with checkbook in hand. And this was how it ended.

[trashcanistanista]

35. The exact same thing happened to me. I was on my fourth

house to buy, had excellent credit and a 50% down payment and a good knowledge of loans. You couldn't get a better buyer, they should have been kissing my ass!! Instead, they tried to bait and switch me on the terms of the loan (increased interest rate and additional fees) when the final paper's arrived. This was a week before closing and only three weeks or so after I signed the initial agreement. I called to complain and make them change it. They tried to tell me the mortgage guy handling it was at a funeral and couldn't be reached. I asked if someone else could handle it. THey said that they absolutely could not contact him at a funeral, and made me feel bad for asking. They said no. It went down to two days before closing. The situation was I was moving out of my house which had been sold at the same day the new buyers were moving in, and they had given notice on their apartment, so they were moving in. We both agreed to this. I had movers pack my stuff, all of it. The loan people knew my situation. Finally I said I would look elsewhere for another loan and told them to cancel the loan. They fixed it and sent the revised papers the next day. You practically have to fight with them to get what they agreed to give you in the first place. How many people are willing to walk away from a loan when the situation is so dire? That's what I had to do, too. Mainly because I knew from past experience. Most people aren't that knowledgeable, especially first time buyers. They rely heavily on the mortgage broker to steer them right, I did when I was a first timer.

[question everything]

54. People like that should be sent to prison

and, yes, most people would not be walking away on a loan (I used this method on a car purchase, once).

But that woman - the story was repeated over the weekend - readily admits that she should not have purchased that house but that the realtor convinced her.

Well, realtors are there to sell houses, not to offer financial advice. She should have sought financial advice, even if she had to pay for it.

[madaboutharry]

17. The one home I owned by myself before I was married was a

one bedroom condo with a small loft area. The place was about 1000 sq feet, maybe. It cost 110k. It was about an hour outside of NYC in a really lovely town in NJ. It was new and very cute. I put 20% down. If I remember correctly, my monthly payment was somewhere around $950 or so. (30 year fixed rates where around 9% at the time).

I easily afforded the payment because I owned my car and didn't have any other debt. This was the home I knew I could afford. End of story.

I don't know how anyone in their right mind could have bought a home over 10x their income. And how did banks qualify these people? It is just insane. I just can't wrap my head around it.

on edit: Look, I don't know what was available to her, but if houses were out of range than she needed to be in an apartment. That is how I see it.

[Hugin]

19. Don't sweat it...

This is obviously an unsupported anecdotal straw-man. An extreme case made up to support someone's fanciful
belief in the Supply-side 'up by the bootstraps' 'wealth is a divine right delivered unto the morally superior' claptrap.

The programming dies hard.

[madaboutharry]

20. It does seem like an extreme case.

But $550k on a $50k a year salary is just nuts. And another thing, Librarians have a Masters of Library Science. This woman went to graduate school. I just think the irresponsibility is overwhelming.

[Hugin]

21. Yes, but the whole point of this is to place the blame on the individual....

It's the "Willy Horton" maneuver. Very popular with the Corporate Class.

All that's needed to dispel it is some specifics (notice how they're missing) or maybe some
statistics.

Okay, if it's One "Librarian" who got snookered maybe it's his/her fault. But, upon inspection it's probably
dozens of "librarians" and the fraud lies at a more Systemic level.

[madaboutharry]

22. I don't mean sound harsh.

I really don't. I guess I just don't get the thinking behind buying a house that cost that much on the salary she earned.

I also believe that lenders are very much responsible for this current mess.

Maybe my thinking is based on my own upbringing. My parents grew up during the depression. They were both very poor and their relationship with money was deeply colored by the grinding poverty of their childhoods. I was always taught that owing money was a "bad" thing and to never buy anything you couldn't afford. Well, now my own children tell me I'm cheap! That is really a slander, I'm not cheap. I'm just frugal most of the time.

[Hugin]

24. Likewise, here...

The point I'm trying to convey is that there will be tremendous well funded push back by the people running these
scams. They like it! It makes them money and they like money and all that it brings.

I'm only trying to confirm your feeling that there's something not quite correct about what's going on.

Two other examples of this same type of activity...

The Election Reform vs. Voter Fraud false issue. Election Reform is a good thing and anyone who works for it is supporting their country. However, as has been so colorfully illustrated by the foolish Republican (oddly enough
same group as those supporting this idiotic "If they couldn't afford it they should have done some DD and not bought
it meme.) leadership. Voter Fraud does not exist. It's a myth.

Secondly, this whole "they brought it upon themselves" campaign is what is known as a FUD campaign. Made popular by
Microsoft. FUD stands for "Fear Uncertainty and Doubt". It has been used very successfully in the past and this is
such a critical issue for TPTB. I'm sure they won't hesitate to use it.

We're in for some serious propaganda. They DON'T want to lose, they can't afford it. Just like that "librarian" couldn't
afford that house.

[madaboutharry]

26. I see exactly what you are saying here.

I agree it was a big con job.

[Hugin]

27. I'm glad we had a good discussion.

:)

[AnneD]

43. Good call Prag.....

What pisses me off about the whole thing is that that you can have a reasonable income and yet still cannot afford a home in some areas. This hits groups that are essential to communities like firemen, teachers, policemen, nurses, and even librarians. Some communities are in such need of these folks that they have had to offer forgivable grants to get them to settle in some communities.I loved working in a rural area, but was paid so poorly that I had to leave. This is what is happening across America. I was priced out of the housing market as a Nurse and single mother for most of my adult life. There really were no homes to be had at double my yearly salary in a safe neighborhood. All folks were building were McMansions-and selling them, many times by fraudulent means.

[question everything]

55. There are many "anecdotes" like that

The local paper had a story about a couple that lived in their house for more than 20 years. How could they defaulted, I wonder.

Well, the man had participated in several scam gambling, or something, and lost a lot of money, so refinanced, then lost his job.. and you can tell the rest.

So every story is different and each comes with its own special circumstances, but the result is that borrowers chose to jump on the bubble train before it was going to be too late, and they lost.

[yellowdogintexas]

32. they sold her on the initial payment. They convinced her she should have the

bigger better newer house because she could have it for x per month. Really. And since I don't know how long she has had the house, and the exact loan she had (but I bet it was one of those loans that have a negative amortization feature..you pay a 'minimum payment' however if that is all you do, you are negatively amortizing the principal so the principal balance keeps growing. If the principal balance reaches 125% of the original amount borrowed, the only payment the lender will accept is the 30 year amortized. )

So anyway, the shark is convincing the buyer that she can have this wonderful house for x per month so why should she settle for this other less expensive house (which may in fact be available to her on a more sensible mortgage)

She didn't do what you did,and what we did which is live within her means.
She didn't go figure out what she could afford long term and search in that price range.

If this was a newly built home, the second year when the increased property taxes hit the fan and then when the adjustable rate hit the whole thing went out of control.


I spent the last three years and 7 months explaining this stuff to customers. I hate that I got terminated but I don't hate that I no longer have to do that job.

[AnneD]

44. Kudos to you......

it's hard being an honest person with scruples these days. I am sure you are much better off for it. You should have a consulting business for buyers. They could really use someone that represents their interests.

[yellowdogintexas]

45. Thank you. I am definitely less stressed, but I miss the structure provided by

going to work every day. I need to get back to work soon and have had some good leads this week. But truth to tell, it was kind of a relief to lose that job even though overall it was actually a pretty good company to work for, just that particular job was getting pretty shitty.

[AnneD]

46. Good Luck....

FYI.... I was born and spent my early years in Ft. Worth and went to College at North Texas. Love the town (better than Dallas) and never pass up the chance to go there.

[yellowdogintexas]

47. well well! I moved to Ft Worth in 1989 and have really enjoyed

living here. I like it much much more than I had expected to, actually. I only go to Dallas for museum events and such.

[ellenfl]

18. my sister has a masters degree

and she still does not fully understand everything about mortgage financing. she was so thrilled that she got a mortgage with no points that she did not realize that the loan origination fee or loan discount fee are the same as points. having worked in lending for 17 years, i can tell you that the borrower does not get a copy of the loan documents up front and is expected to read them at the closing table. there is just too much for the average person to research to be fully informed. hell, i used to prepare loan documents and i often used cheat sheets to make sure i followed all of the regs.

i agree that people should be more conservative but when your banker, whom you have no reason not to trust, slips some terms past you or flat out lies to you, you cannot totally blame the borrower. some people do not know that if it seems to good to be true, it probably is. in the words of p.t. barnum, there's a sucker born every day. i am sure there are going to be a lot of savvy borrowers after the fact . . . at least for a while.

i think that the government should give the banks money for a bailout but only under the conditions that they forgive the upside down portion of the mortgage debt. in other words, pay down the borrowers' mortgages with the (corporate welfare) money that the gummint is going to give the banks anyway. everyone wins . . . the bank gets some cash and the homeowner gets to stay in their home. trust me that banks do not want the real estate.

ellen fl

[LiberalFighter]

25. When a person needs cheat sheets then that doesn't say much

for the lending industry.

It appears that this industry and probably many others utilize their own regulations to make everything confusing yet they complain about the government regulations.

[ellenfl]

33. so you're saying i should have memorized all of the

banking regulations? you try it and let me know how that works out for you.

ellen fl

[LiberalFighter]

37. No I wasn't saying that. I was saying that they are making it more complicated

than what it needs to be.

[ellenfl]

39. well, since i started in banking in the 1981, i would say

it has always been too complicated. in fact, i always found it humorous that the legislated truth-in-lending disclosure and other respa disclosures are near impossible to explain to the average consumer . . . never mind trying to explain interest rate basis, rule of 78 and other ways for banks to get the most bang for their buck.

i'm not sure the banks and their employees (legislators, not worker bees) want the consumer to know what they are signing. just my opinion.

ellen fl

[LiberalFighter]

41. I was thinking that they didn't want the consumers to really know either.

[no_hypocrisy]

36. Nearly two years ago, my clients were young, first-time home buyers.

They wanted to buy a house on a lake. The home inspection report revealed a structure that was a combination of "The Money Pit" and "Mr. Blandings Builds His Dream House". Black mold all over the place, significant cracks in the foundation, etc. Their realtor tried to talk them out of the deal. I went on record against the deal, albeit indirectly by repeatedly asking them if they had enough money. Their mortgage included a piggyback loan and the purchase price was far higher than the actual value of the land and structure. They went through with the deal.

You never know as an attorney or a realtor when you will be included in a pique of buyers' remorse and you have to cover yourself or refuse to participate in the transaction.

[Jim__]

40. Call her stupid. Fine! But how did her bank qualify her for the loan?

She should have known? How much did the bank make on the loan? How much did the realtor make on the sale? Was this loan bundled with others and sold as a triple-A rated investment? Throw her out on the street. But the people who made money on the sale, qualified her for the loan, and bundled and passed on the loan should be in jail. They are causing a financial collapse in this country.

It's OK for her to be thrown out of her house, but she shouldn't sue her realtor? Not all the blame and all the suffering should be put on the people on the bottom of the pile. It's time for the rich to pay too. And, I'm not talking about fines that amount to 10% of the profits they made. It's time for them to go to jail. Just like I would if I stole, embezzled or defrauded someone.

[northernlights]

42. she owns part of it

but certainly not all of it.

Those of us who were around a few decades ago can remember when you had to qualify to get a mortgage or any credit. Hell, I couldn't get a credit card when I was 30 because I was a single woman who paid all my bills on time (while my occasionally self-employed "concert pianist" bf had 40 maxed out!).

I was shocked by the change between the condo I bought when I put 20% down and there were strict rules about income:debt ratios. Versus 10 years later, when I was looking to move up to a house and there were 10% and then 5% and then 3% and then 0% down loans, and ratios were quaint memories from the old economy.

I didn't trust the nonsense, and ended up priced out of the market. (I could have made a fortune if I'd ignored all the cv and bought the 1st place I looked at on the spot).

But I honestly can't totally blame the younger people who didn't have my early credit experience, and came out into the 90s job boom and easy credit.

I know they were lied to because the realtors and mortgagors lied to me. It was an unbelievably hard-sell, they were always trying to sell me more expensive than I was willing to buy. Some outright suggested I commit fraud and lie about my income.

I do blame those who lied about incomes they didn't have. Fraud is fraud and it shouldn't require any due diligence to know the difference.

But the pressure to buy -- with prices skyrocketing -- and the sales pitch about how you could refinance in a couple years or sell and make a huge profit in a couple years. Plus the media hype about flipping. I can understand how people could be duped.

Aspergris, it's all very well to say she should have done her due diligence. The fact is there was no place to get the truth -- you either already had learned it from hard experience, or you had nobody to tell you the truth. The bankers were lying, the mortgagors were lying, the press was hyping and lying, the lawyers weren't advising, the realtors were lying. Everybody you should have been able to turn to for sound advice was too set on raking in their fees, and the hell with their clients.

And now we all get to pay. Whether we bail out the inexperienced -- and personally I don't think refinancing them into affordable mortgages really qualifies as much of a bailout -- or let the empty houses turn into neighborhood crack houses, we will still end up paying.

Personally, I prefer refinancing the mortgages. I like what little I've heard of the plan. The mortgagors don't get a big bailout -- they get to take a set loss. If by some miracle the housing market recovers, the homeowners we "bailed out" have to share any profits with the feds.

[Yavin4]

48. We Rely Too Much On DEBT In Our Culture And Not Enough on WAGES

Our parents and grandparents' generations formed unions and won better pay and benefits, and then used that pay to buy houses that they could afford.

Ever since Reagan, we've been duped into thinking that DEBT and EQUITY are one in the same, and they just aint.

[RainDog]

49. She should know better than that

if the place where you live has property that is so exp., then you have to rent. You have to move 30 miles away. You have to take a job somewhere else.

But that much house on that salary is preposterous.

Responsibility goes both ways, doesn't it? I don't know who thinks it's some sort of issue to hire a lawyer to go over papers that will put you in debt for a loong time. So what if a banker is offended. It's a biz relationship, not a best friend.

[Cassandra]

57. Her mortgage broker should know better than that.

After all, that's his business. But all he cared about was his fees, repayment be damned; that's someone else's problem.

[Xenotime]

50. Maybe should could afford it at the time

but then when prices whent it made things tough. Not difficult to imagine. It happens all the time.

[CrispyQ]

52. Many homeowners went with ARMs

thinking that by the time the monthly payment went up, so too, would the value of their house, so they could sell & make a profit before paying the inflated monthly payments. And while real estate does eventually go up, it can also hit a bad spot. We got caught in the S&L crisis in the late 80s. Hubby had a bad divorce & we couldn't sell the house for anything close to what it had been worth just 18 months prior. We took a $50k hit that took us years to recover from. There was no bail out for anyone back then.

There's plenty of blame to go around in this mess. Greedy & ignorant homeowners, greedy bankers, greedy realtors, you name it. Everybody wanted something for nothing & now that they're getting burned, those of us who played by the rules get stuck with the bill.

[Trillo]

56. Perhaps. Create that desire, even if they can't afford to buy?

I've got to wonder about the conditioning our media gives everyone, starting in childhood and continuing throughout, regarding what type of living tends to be average. While I don't watch much TV anymore, Most shows I've watched, with a few exceptions here and there, show living conditions far above what I could ever afford. Big, spacious kitchens. Large living areas. New cars. Maybe you get the point.

We've been living in a culture that pimps opulent consumerism at every opportunity. Create that desire, even if they can't afford to buy?

Oh, well, "it's just a numbers game".