What is Digg?197 Comments
- TomK88, on 04/19/2008, -1/+56Perhaps to more reasonable levels where the average family can afford them?
- FulcrumVitesse, on 04/19/2008, -4/+40At the same time, the managers of the banks that speculated in giving out loans that were highly unlikely to be paid back are receiving record bonuses. Why are there no consequences for them?
- Schrodinger2, on 04/19/2008, -2/+37Hopefully enough to give actual SAVERS and holders of REAL MONEY a chance to buy homes for cash or with large down payments and punish those in society that think it's fine to "buy" everything with money they don't have.
- jedmed, on 04/19/2008, -1/+29This statement from the article said it best:
"... the next stage will be about people who have every reason not even to try to pay their mortgages." - AlwaysAwake, on 04/19/2008, -6/+28There will be a lot of losers, and just a few winners. How low can house values go ?
- YodaJones, on 04/19/2008, -0/+21I am happy to see this happen. I want to see a few banks and mortgage companies like Countrywide go out of business. Home prices in California have been ridiculous for decades. I often wondered how so many people in California could afford those $600.000 and up homes, with two brand new upscale automobiles in the driveway, 2-4 quad off road thingies, wave runners and motorcycles. I often wanted to knock on their doors and ask what they do for a living and maybe get some financial tips. Fact is that most likely 80% of Californians have been living above their means for many many years and this mess had to happen sooner or later.
- duggdowncatisad, on 04/19/2008, -0/+20He doesn't mean consequences as in prison sentences, he's asking why the government insists on bailing the banks out instead of letting them take the losses. If I go to Vegas and put $100k on black, and the ball lands on red, the government isn't bailing me out. So why are banks different? Answer, obviously, is connections and graft and corruption and stuff
. - TomK88, on 04/19/2008, -2/+21Because they did nothing illegal? You'll have to ask the shareholders of these companies about their compensation strategy.
- PacoLugi, on 04/19/2008, -2/+19Has anyone heard of a fixed rate mortgage?
- makkaveli19, on 04/19/2008, -1/+18no offense, and i apologize to anyone who loses their home. BUT this is a great investment opportunity for us canadians. Maybe even a vacation home.
- kiddcode, on 04/19/2008, -0/+15This is a great investment time for anyone who wisely saved their money for something like this. The best deals to be had out there will be made in the next year or so.
- pixelguru, on 04/20/2008, -1/+16I've been attempting to ride out the housing bubble as a renter. I could have chosen to buy a hugely inflated house 3 years ago since banks were giving loans out like candy, but I chose not to. Now I'm outgrowing our rental and I'd like to start gaining some equity. Unfortunately, despite houses in this area sitting on the market now for years instead of days, prices refuse to come down. I can't really blame the homeowners for trying to get what they can for their houses, but when a property has a for sale sign in front of it for 2+ years no matter how many different realtors they try, it's time to drop the price. All I'm asking for is a fair price, but I'm not buying anything until I get it.
- apinstein, on 04/20/2008, -0/+14This is a great and hilarious explanation of the current mortgage crisis.
http://docs.google.com/TeamPresent?docid=ddp4zq7n_ ... - greeniemeani, on 04/19/2008, -3/+17Do you live in South Dakota?
- e68895f, on 04/19/2008, -0/+13"but this boat can't sink"....
- YZBot, on 04/19/2008, -0/+12Sounds like someones into shemales.
- inactive, on 04/19/2008, -1/+12Oh those poor people that got the $1,000,000 loan that they can barely pay the payments each month when they could have got the $500,000 loan and not lose everything when the economy slows down.
- logicet, on 04/19/2008, -0/+11I think this answers the question? When people can afford the 20% minimum down payment, or a good percentage of people can afford to pay cash to own "free-andclear (minus humongous yearly taxes), or when people who own free and clear are comfortable with carrying the mortgage notes themselves as in the past, that's where the bottom is.
- psychotron, on 04/19/2008, -0/+10It's not time to buy, not yet. Monitor real estate listings and you will see prices going down week to week. Current inventory stands at something like 11 months in California, you shouldn't buy until that inventory goes back down to 3-4 months. It's amazing that we might see prices from maybe 10 years ago. Save your money and you'll be sitting pretty in a couple of years.
- rficwizard, on 04/19/2008, -6/+16A house is "worth" whatever the market says it is worth. No good has a particular amount of intrinsic "worth".
- morgino, on 04/20/2008, -0/+9Being one of those Ca. borrowers it seems a ***** is on its way. A bunch of my friends that made a good amount of money got into arms that because of the changing lender programs cannot refinance and are stuck at either a crazy rate or owe more then there houses are worth. I have a friend that between her and her husband make over 300k a year but are paying over 5 grand for a 600k mortgage. They can't refi and are going to short sell. I have three other friends that are in similiar situations. Hell I was a loan officer, got bad advice to buy a place in Vegas, foreclosed on that and just declared BK cause I havent made ***** in two years. This isnt a subprime thing, all my friends and I who had the 780 fico now have the 480 fico. Maybe thats why I am drunk right now
- zspeed78, on 04/20/2008, -0/+9You forgot the cost of LAND. Which goes up with the cost of homes in the area.
- nirav72, on 04/19/2008, -0/+9Nah, The next crisis will be the credit card crisis. As the credit/banking markets take a plunge due to the housing markets ,consumers will start missing credit card payments due to the ripple effects in the economy. Average U.S household credit card balance was $6000 in 2007. Add high fuel cost , plus inflation for other daily necessities and you have a receipe for disaster for folks who lived beyond their means. Of course the poor and lower middle class will suffer also. This will go on for a while, as the market is still going through a shake up.
- felman87, on 04/19/2008, -1/+9pretty bad. Lets just say that my pants are no longer white.
- DiggzDE, on 04/19/2008, -0/+8What can you expect when there was no one making sure the under writings were good? You can have a strong economy or you can make sure everyone is able to own a home by forcing lenders to do loans to already troubled borrowers. You can't have both and that is just one of a few reasons why we are seeing what we are seeing now.
- inactive, on 04/20/2008, -3/+11Message to banks: SUCK IT!
These ***** need to be stomped into submission and regulated up the ass. ***** the banks. - Fixhotep, on 04/19/2008, -1/+9Because some of the loans were guaranteed by the government. It was MORE likely for banks to get their money back if they lent to people who couldn't afford it. It's disgusting really.
- evilbob333, on 04/20/2008, -0/+8Yeah, but that would be the responsible and safe thing to get.
- nonsequitor, on 04/20/2008, -0/+7The people who have the best property don't have mortgages.
- faskippy, on 04/19/2008, -2/+9Where is the incentive to NOT be a sorry, greedy, irresponsible F**K, if we, all other taxpayers, are forced to bail them out, against our will?
- MindTrigger, on 04/20/2008, -0/+7Yup, their value drops to the point that they will never recover the money back, so making payments is flushing money down the toilet. Better to turn it in and take the credit record hit.
- zanderw00t, on 04/19/2008, -3/+10It doesn't matter how low the value of houses go if you can't get a loan to buy the damn thing.
- catalysis, on 04/20/2008, -0/+7"the borrowers, who have option ARMs about to reset and are much better off handing the keys to bank—and maybe even scooping up the foreclosed house down the street."
This is what a lot of people are doing according to my realtor friend. They buy a second home while they still have good credit, then walk away from the first home and file bankruptcy. A lot of the people who took ARMs are not stupid. The whole point was to game the system and many had a zero-risk exit strategy going into it. The banks were complicit in taking the risk, knowing that they would always be bailed out by the fed if the loans went bad. Now we all pay the price with a lower dollar, higher gas and food costs. - flipmoe, on 04/20/2008, -0/+7I live in the SF Bay area and seriously rents are out of control. As more homeowners 'walk away' or default, more and more folks need an apartment. A 1x1 in the complex that I live is now going for $2300.00/month. (up from $1900.00 last year at this time).
It's absolutely insane. Good luck I just closed on a house in Ohio :) Gettin' outta here - stizz, on 04/20/2008, -2/+9and the bottom is falling out of the dollar too
- kansai22, on 04/19/2008, -2/+9This was always my question. If you know that people have little equity and it is more likely that they will default on a loan why in the hell would you charge them more and give them outrageous rates, which will only make it more likely that they will default. It just sounds like these lenders shooting themselves in the foot. I really just don't understand the mindset of charging poor people more when they have less which is going to cause them to not be able to pay. All thats going to happen is you are not going to make your investment back.
- sanman, on 04/20/2008, -1/+8Stupid. You don't force someone to take a loan. That's the choice of the borrower, and it's their responsibility. It's like blaming the priest who married you, if you end up divorced. Time for people to take responsibility for their own bad decisions. The tendency to seek out others to blame for one's own bad financial choices is what's really responsible for a bad economy. Because those who can't blame themselves or hold themselves accountable/responsible for their own mistakes, will never learn from their mistakes or learn how to make good decisions. These people will forever be screwing up their lives again and again, and asking others to hold the bag for it. If you took out the loan, then you're responsible. Learn about personal responsibility.
- stizz, on 04/20/2008, -0/+6But the economy is already destroyed! Time to format and reinstall.
- cannarymburns, on 04/20/2008, -2/+8totally true. the morons who took out these sub-prime loans aren't the only losers, the people that were not insane enough to purchase a home with a stupid adjustable rate mortgage and no downpayment lost too, because homes are completely unaffordable for us. the only winners here are the ***** who gave out those loans, who thought it was a "foolproof" plan to take peoople's money in hopes of them defaulting and then taking back the property and reselling it again. those geniuses though didn't account for the moronic aspect of their greed pulling the carpet out from under the feet of an economy that was already ludicrously dependent on the real estate market, because of the stagnation of the stock market after the dotcom bust. its all good for the ceos though, while their banks are crashing and burning, they are walking away with severance packages that will make your jaw slack down to the floor... i don't feel jealous though, i have one thing they don't have, a soul.
- poidh, on 04/19/2008, -0/+6They'll go low enough that the cycle can begin again. It's a cyclical process because that's how money can be made, the difference between point A and point B.
- Jem7vwh, on 04/19/2008, -1/+7These people didn't belong in these houses anyways making it harder for us saving for a house the right way to get one!
Now when house prices crash I might actually be able to afford one. - pstroll, on 04/19/2008, -1/+7Good explanation of the ***** storm that is about to hit the economy: http://www.youtube.com/watch?v=lkQz9Aw4dNo
- thewump, on 04/19/2008, -2/+8Sounds like great news for anyone like me who has always wanted CA beach front property
- SPRFRKR, on 04/20/2008, -1/+7My advice to Californians: GET TO THE CHOPPA!
- Webconomist, on 04/19/2008, -4/+10Sadly and frighteningly, this is another step towards organizations like OPEC setting their currency benchmark as the Euro; potentially further crippling the US economy.
- Lynxpro, on 04/20/2008, -2/+7The Euro is a joke. The only reason why it has increased in value is to spite the Dollar. Europe has a higher unemployment rate than the US, and if the taxpayers of the UK and Germany weren't blowing money to subsidize the poor areas of the EU, it wouldn't even be worth talking about as a powerful institution.
A private currency as advocated by some in the Council on Foreign Relations is the future replacement of the Dollar's hegemony. - MrWhite7, on 04/20/2008, -0/+5And during the formatting, the starving masses would adopt a new OS... One that may run smoother, but with a lot less resources, more sphagetti code, and no internets.
- phenolholic, on 04/20/2008, -1/+6what the ***** is in ohio? have fun adjusting from SF lifestyle to ohio's
- psychotron, on 04/20/2008, -0/+5Read the papers, these smucks were buying $700,000 homes on $40,000 a year salary. Is not about knowing the nuances of mortgages, it's about having simple common sense to realize you cannot afford that mortgage on that salary. The American way is working hard, saving for a 20% down payment and getting a fixed 30-year mortgage. My wife and I make about $6,000 a month combined and we would NEVER in a million years get a $2500+ a month a mortgage. It's simple common sense.
- byronm, on 04/20/2008, -0/+5I don't live in CA but BofA just closed my HELOC by dropping my limit, flagging it at 100% utilization and sending me a letter that my home value fell. New driveway, new windows, paint job inside/outside, home office refurb, bathrooms refurbed, new wood floors, new porch, new balcony, replacement lighting, new ceiling fans, septic system refurb, tons of landscaping. The letter basically said "no notable improvements to increase property value" and looked like a canned letter. I'm sure they didn't even do a driveby valuation but just summed up a reason to cut my credit line and F up my credit report by putting me at 100% utilization so other credit card companies will have an excuse to start cutting my limits and starting the downward credit cycle.
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