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265 Comments
- brbeaird, on 01/02/2008, -2/+172FTA:
"People went to the bank and got a loan on the increase in the price of their home. They went out and spent all that money," he explains.
"Price of the home went up again, they went back to the bank and got another loan. They went out again and spent that money on cars and jewellery and furniture - whatever they wanted."
I have a really difficult time feeling sympathy for these people. Their carelessness/willingness to pay $700,00 for a $200,000 house along with banks' insatiable greed have really done one over on the housing market. - peterlisanti, on 01/02/2008, -0/+63Dear Mr. Real Estate Agent in the picture,
Please take your bluetooth ear-piece out of your ear when you aren't using your phone.
You look like a retard. - howitzeral, on 01/02/2008, -6/+68Agreed. People like that DESERVE whatever financial troubles they get themselves into.
- kingmanic, on 01/02/2008, -5/+55Except the real victims aren't those morons, it's your pension fund, your tax money, your stocks, and your home value. So you can sit and be snobby about it but the people paying for this fiasco aren't just the idiot borrowers or the idiot lenders. In fact the lenders and idiot borrowers will have the blow softened via your tax dollars if your are an american or your investment dollars if you are anyone else.
- trajomoreno, on 01/02/2008, -1/+44FTA: "Everyone was making too much money to be worried."
I live in Sacramento (about an hour north of Stockton), and I worked in the accounting department for a real estate brokerage during the peak of the boom and the start of the slide. In the beginning, it was insane to see the commission checks pouring in for our agents. People who had just gotten their licenses were getting tens of thousands of dollars each month. People were jumping into the game for a the chance at a legit "get-rich-quick" scheme. Boy did things change in mid-to-late 2005. Agents were jumping ship left and right, and Sacramento had over 10,000 homes listed for sale.
It's really sad to see America making many of the same mistakes in regard to their pursuit of debt as were made during the 20s. I don't think we'll fall into a depression again, but we're certainly in a major down-turn that doesn't look to be improving anytime soon.
What's really sad is watching naive people who bought nice homes for their families lose those homes to the banks and have to uproot their children out of desperation--all because they lacked the foresight to see the higher interest rates and the balloon payments on the horizon. - webtekie, on 01/02/2008, -2/+43Exactly. An where the ***** does the government get off "helping" these people? May be I can send them my holiday shopping bills and they pay for them too?
- gamer31, on 01/02/2008, -4/+45What the ***** does digg to comment ratio have to do with the digg system?
- Caalro, on 01/02/2008, -0/+41Having lived in Stockton for 3 years, as a Navy Brat, I can tell you that there are very few places I would never return. Stockton is the top of the list.
- lolkthnxbai, on 01/02/2008, -0/+35I live here in stockton California all I have to do is look down the street to know it's bad.
- swimmer88, on 01/02/2008, -0/+35i went to school in Stockton up until last year. You can't drive down a single street in the entire city without seeing multiple houses for sale.
It just makes things worse because the city is already poverty stricken and filled with gang activity and crime. (#1 violent crime city in California). - orlyfactor, on 01/02/2008, -0/+33Why is cell phone earpiece man giving the "Oh ***** I crapped my pants!" look??
- duckfigg, on 01/02/2008, -3/+35sure, they do. but this mess is so big it's going to hit everybody, deserving or not. and in the end, responsible taxpayers will be stuck with the tab for these greedy fools.
- lpse2000, on 01/02/2008, -2/+29Well I hope it gets "worse", because I'm in the market for a house.
- trer, on 01/02/2008, -2/+26"People went to the bank and got a loan on the increase in the price of their home. They went out and spent all that money," he explains.
"Price of the home went up again, they went back to the bank and got another loan. They went out again and spent that money on cars and jewellery and furniture - whatever they wanted."
Says it all. - banzai26, on 01/02/2008, -1/+24The government won't help these people - they showed that when they passed the bankruptcy bill. They will, however, help the banks that were stupid enough to make loans they knew would go into default.
- brstilson, on 01/02/2008, -1/+23There is one principle that would have avoided this whole situation:
DON'T BUY THINGS YOU CAN'T AFFORD
I have no sympathy for people who bought a house without budgeting the costs. - londubh, on 01/02/2008, -1/+22Looks like the lenders learned their creative accounting practices from Enron.
- MindTrigger, on 01/02/2008, -0/+20People are stupid, no doubt, but handing out shady loans is no better. When I bought my first house12 years ago, my loan agent basically asked me to make a fake pay stub to make my income look 'more attractive' to the underwriters. At the time, my wife and I really wanted our first home, so it was very tempting. Looking back on it now, I can see it for what it was. A greedy loan agent willing to pull any stunt she could to get the deal done. Luckily, we were able to afford the house, so it wasn't a problem. Repeat stories like mine, and add ripp-off RE agents and greedy banks, and you have a recipe for exactly what we are seeing in Stockton and other cities.
- mucello, on 01/02/2008, -3/+22Now why can't we see quality, insightful news articles such as this from the American press?
- Jexie, on 01/02/2008, -2/+21You should show your rage by leaving digg and never posting again!!
- HoratioHellpop, on 01/02/2008, -1/+19Dug for the priceless "holy cow, I've got to find a new career" look on the realtor's face
- krnldmp, on 01/02/2008, -0/+17CREDIT is over rated.
- troycott, on 01/02/2008, -6/+21damn it feels good to be a renter
- founderofpork, on 01/02/2008, -0/+15Seriously. I fail to see how people who were too stupid to bother educating themselves about the HUNDREDS OF THOUSANDS OF DOLLARS they were borrowing should get any ***** sympathy. I realize there were some deceptive loan practices occurring, but jesus christ, some things are just obviously out of your ***** price range and you should know it.
- ganymede2010, on 01/02/2008, -1/+16Being in the Real Estate Business I can tell you first hand how bad it is in Stockon. The home prices have fallen 25% in the last quarter alone. There's plenty of families who currently owe more then what their houses are worth. And that's just sad. Because many of them qualified for zero down, pay option adjustable rate loans. With a 3 year pre-payment penalty (meaning, you'll have to pay 6 months of interest to get out of your loan). Most of the homes in stockton were new homes built by greedy builders. Who lured the home owners with ficticous *free-upgrades* if they agreed to finance thier loan through their lender. What the home owners fail to realise is, they were paying for those *up-grades* by the inflated closing costs being charged by the builders prefered lender. There's so many ways to screw over homeowvers that they simply stand no chance against a skilled Mortgage Broker. And that's what's sad, the banks would often turn a blind eye. And cash in on the profits.
- troycott, on 01/02/2008, -2/+16or maybe 10 houses if I buy in Stockton!
No I just plan on renting until the crash. Then I'll buy your house for 60% less then you paid for it, sorry, borrowed for it. - howitzeral, on 01/02/2008, -1/+14Unfortunately that's true as well. But it's not the individual homeowner that got a home equity loan to buy luxury items that's causing the problem with the rest of the economy. The banks/lenders have a lot more to do with it than the homeowners do. They're the ones who issued all these loans but then turned around and sold off the risk to investors. Seems to me that the institution that assumes the risk should bear that risk. I could explain a lot more in detail, but nobody wants to read a 10 page rant.
- ChaosMotor, on 01/02/2008, -1/+14Not to mention this type of behavior has been encouraged ceaselessly by the banking and financial systems who implore these people to spend like this. People wouldn't be acting like this if not for regular reinforcement that it's okay to do so. In the end, the people are milked of all their assets by the unscrupulous lenders who encourage them to take on debt and spend their cash. Eventually all the assets are held by lenders and all the debts held by the individual. Yet another way to milk the unsophisticated commoner. There is a damn good reason that previous generations were sticklers for savings and distrusted financial interests - and this is case and point for their skepticism.
- nachomonkey, on 01/02/2008, -3/+15Money as Debt http://video.google.com/videoplay?docid=-905047436 ...
- radink360, on 01/02/2008, -0/+11The problem is down to the fact that loaners were bending rules to get people loans who should have never been able to qualify.
- cambob76, on 01/02/2008, -2/+13People are stupid. Banks are evil. America is going FUBAR.
- wilf_brim, on 01/02/2008, -0/+11I'm sorry that so many people are going to be hurt. But please, do NOT let the politicians bail out those responsible here. It isn't smart, and it isn't fair. Those that gave out the loans on overinflated properties need to go under. Some people will lose their houses. The reason that I'm so negative here is that the lessons are not learned. If the Wall Street and other banks get bailed out by the government, they will just do the same thing again. The market was fueled by overly low interest rates. It was sustained by insane lending practices, and the ability to hide some really crappy loans.
The people who were smart, and either didn't buy homes at all, or only bought what they could realistically afford, will be punished for being prudent. And that isn't fair. - sfrench, on 01/02/2008, -0/+11Stockton is a interesting case as well because of it's location. While there isn't a whole lot of high paying jobs in Stockton itself, it's at the outer limits (~90min) of commuting distance to Silicon Valley and therefore there were/are lots of people looking for homes that they could get for less than what they would pay if they lived in SV itself.
- purpmint008, on 01/02/2008, -3/+13Paul doesn't like fiat currency.
- Smuikas, on 01/02/2008, -1/+10"I don't think we'll fall into a depression again"
Think again. Peak oil; greed of our administrators worming its way through congress and the federal reserve; collapsing housing economy entwined with lending and banking; plummeting value of the US dollar; most of our debt owned by China - with whome we have mutually assured financial destruction. We stop buying from them, they call in their debt, we go bust and them shortly after. Or: They call in their debt, we go bust, and can't buy from them anymore - and with no one else buying their crap goods, they go bust.
Worst case, be prepared to buy self-destructing GE crops from big agribusiness (you have to buy new seeds every year + special fertilizer), make a mad rush to buy plots of land from said agribusiness, and learn how to farm. quickly. Without oil.
Best case, we come up with scalable renewable power in the next five years, prosecute the criminals responsible for the rampant greed and corruption in our agribusiness, banks, government, and defense contractors, and then.. well, we'd have to vote for brand new electorates, because they'd all be out of a job!
It'll never happen though, so get ready for some rough times ahead. Give it five, ten years for things to get bad - then get used to bread lines. - ryanward, on 01/02/2008, -1/+10Buyers lying about their income to qualify and we are supposed to pay for it? I don't think this is good practice.
It's time to stop looking at the real estate market from a national perspective anyway. Real estate is local.
I'd write about it, but, it would get buried because I sell real estate. - ngmcs8203, on 01/02/2008, -0/+8There were many better options than Stockton if you were willing to put that much into your commute. If you consider Stockton (with traffic) is nearly 2hrs to Santa Clara (heart of SV) you could have taken your money and moved somewhere a little nicer. Stockton is full of crime and was destined for a crash. I don't think there are many options worse than Stockton when it came to choosing a 2hr commute for cheaper housing.
- Changa, on 01/02/2008, -1/+9It's a real shame the banks were so damn greedy as to let them.
I don't have much love for the people that took the loans but damn I wish the banks has used a bit of responsibility when they gave out loans. - jbird71, on 01/02/2008, -0/+8Sure, I have no sympathy for them either. But unfortunately there are lots and lots of these people around, and collectively they are going to screw us all into a deep, deep recession.
- webtekie, on 01/02/2008, -0/+8Amen!
- phy6uva, on 01/02/2008, -1/+9next step... all banks call in any and all margin loans and then we can hear president Bush declare mission accomplished... again...
- ZenFountain, on 01/02/2008, -0/+8Banks should have never been allowed to sell securities, the root of the problem and the end of the problem as I see it, but I don't claim to be an expert in economics.
- banmaster, on 01/02/2008, -1/+8Its their own damn fault for borrowing way beyond their means (and their future means) and the banks' fault for letting/encouraging them!
- rowlodge, on 01/02/2008, -0/+7they just cleared like 20 acres across the street from our house to sell lots but nobody has bought any in 2 years.
- solidfusion, on 01/02/2008, -0/+7Amen to that as I'm in the market as well!!!
- banmaster, on 01/02/2008, -3/+10To know that over your lifetime you'll have paid as much rent as it would have cost you to buy 5 homes?
Yeah, I'd be feeling real good about that as well.... - webtekie, on 01/02/2008, -1/+8In Brooklyn, NY where I live they can't sell all the ***** they built. Around my building there is condo that has not seen any tenants since it was built in 2004. I want to see blood! Lot's of blood!
- theutopian, on 01/02/2008, -0/+6So do I. That's when us renters will finally be able to get on the ladder. A housing crash will only create new opportunities. You have to destroy to create. A basic economic principle.
- Chirp08, on 01/02/2008, -4/+10The housing crash is nothing but good, its going to weed out the people who took advantage and ***** up the system. Around here houses are going up every day, there's no shortage of new developments, and many are million dollars homes.
- ericdano, on 01/02/2008, -0/+6Stockton is the place you send people you don't like. Really. It is the worst area in the bay area (if you can call it part of the bay area). Personally, Pleasanton and Dublin are worlds better than Stockton.
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