What is Digg?280 Comments
- minoss, on 12/16/2008, -9/+66No, help no one. Stop punishing those who made good decisions.
- WordsnCollision, on 12/15/2008, -4/+52"Some 11.7 million Americans owe more on their mortgages than their homes are worth." Payback really is a biatch...
- piratearggghhh, on 12/16/2008, -2/+43Maybe this IS the recovery and homes were never meant to be so high. Do we really need to go back to the days when a small house in Southern California is over half a million dollars?
- EarlOfLade, on 12/16/2008, -1/+35What *****!
The houses haven't lost damn dollar. What went down was the expected willingness to pay a price far above the real value of the house. Most houses are in reality valued far above their real worth based on intangibles. - badqat, on 12/15/2008, -3/+35And USA Today reports it may be decades before housing prices recover!
- Tynan, on 12/16/2008, -0/+31Nothing has lost value. They were never worth that much in the first place.
- kalvinb, on 12/16/2008, -1/+32Well that's not surprising since home prices were artificially inflated trillions of dollars in the few years prior. Homes were selling for twice what they were worth.
Now they're going back down to what they are actually worth. - inactive, on 12/16/2008, -0/+29Excellent news for those of us who don't own homes, and not terrible news for those who don't plan on selling in the near future and who don't have subprime mortgages.
- inactive, on 12/15/2008, -6/+31Yep, and most of the homes that are collapsing in value are cheap and quickly build. They'll have to be bulldozed in 20 years anyway.
Bubbles suck, and the people who prop them up suck more. - inactive, on 12/16/2008, -3/+27No.
All those idiots in CA who agreed to pay 1 Million bucks for a garage on 60k a year need to hit the ***** streets. - andyb747, on 12/16/2008, -0/+24Your house is to live in. Its not an ATM machine.
- inactive, on 12/16/2008, -3/+26USA Today says a lot of things.
- Exhibitionist, on 12/16/2008, -7/+28I have to laugh at the term "predatory loans". It's kind of like saying "predatory cigarettes" or "predatory alcohol", like people that take out home loans are ***** forced into it.
- MiddleAmerica, on 12/16/2008, -9/+28I work in the mortgage industry & predatory lending practices are no joke.
Loan brokers are the worst, they lie their asses off about what the loans will do, payments, what a buyer can afford, etc.
I've been talking to other people in the real estate & finance industry for years about how this was going to be a serious problem.
Unfortunately many buyers are not contract savvy & are too trusting.
And the brokers & banks have no incentive to make sure that the loan will be repaid, because they sold them off to Wall Street.
Then Wall Street over extended themselves loaning out a thousand times the worth of their collateral.
There used to be regulations in place to prevent these things from happening, but they were taken away by Republican legislation over the years.
- ultra80, on 12/16/2008, -0/+19Not surprising. Any statistician could have predicted it based on nothing more than these:
1. The average annual increase in home value since world war two is slightly over 3%. (IIRC, but in any case it is around 6% annually since the early 1970's)
2. We were in a period where annual values were increasing in double digit annual increments.
3. Regression to the mean is a bitch. - FenianNProud, on 12/16/2008, -0/+19Or at least 2 Trillion in inflated 'value'.
How can anyone in their right mind actually believe that the house they bought, which was flipped by 2-3 previous owners within 1-2 years, was actually work 25%-40% more now, lol. - briLo, on 12/16/2008, -4/+22And how do those of us who didn't get in balls deep benefit from these bailouts?!?? I haven't lived above my means, I've saved a bit and made sacrifices while ***** went out and bought $300,000 homes and $50,000 cars and the ***** banks lent them the money while barely raising an eyebrow!!!!
So the people who lived within their means should have to pay for you ignorant ***** that can't understand the basic idea of living within your means. - trollick, on 12/16/2008, -4/+21***** you. If you want to help some ***** who grabbed a house he cannot possibly afford, just go and write him a check.
- aron1185, on 12/16/2008, -1/+18Wait? You mean to tell me that, even though my credit sucks, and I can't pay my bills... you are willing to give me a loan to buy a house? SWEET!!!
- Feenix566, on 12/16/2008, -0/+16The houses didn't lose value. Those houses are just as valuable today as they were when they were last purchased. What's going on is that we're all realizing that the people who bought them paid too much for them. The market is correcting that fact, and the prices are going down. We should all be celebrating in the streets that the American dream of home ownership is now more viable than ever, what with home prices coming down to more affordable levels.
I'm sick and tired of everyone in the media calling this a "crisis". It's not a crisis. It's a market correction. - theutopian, on 12/16/2008, -0/+15More like home values now reflect their TRUE value.
No more 2 bedroom homes selling for $500,000.
The market has corrected itself. Since we all should be worshipping the market like a God, we cannot speak against God. Deal with it people. - FredFredrickson, on 12/16/2008, -0/+15The banks, lenders, and buyers are all to blame... but none of them deserve a bailout for this mess.
- inactive, on 12/16/2008, -1/+16Agree.
I bought a house I could afford. I dutifully paid my mortgage every month, along with my property taxes, insurance, etc, etc. I paid a little extra every month in a effort to reduce my payback period.
Last month I paid off the house in year 17 of the 30 year mortgage. This in spite of the fact that I lost my job of 22 years.
Wheres my reward? - DangerCollie, on 12/16/2008, -4/+18If you pay $5 for something that should cost $2, it's not really fair to say the item "lost" value because the price corrected. When it comes to home prices, there's still quite a bit of correction left in the market. I'm guessing prices will over-correct on the way down, bob back up to something resembling normality, and then remain relatively flat for the next 10 years.
- BullHunter, on 12/16/2008, -2/+15All this happened in the eighties - and the time before that - and the time before. But we learned that it's cyclical and will happen again, right? History does repeat, especially when bankers and politicians inflate the currency, shares and property prices beyond its capacity just to see it burst and ruin many people's life savings. So why do we, the people, put up with it. They will do it again. Next time it will be to your retirement fund and your children and their children (sorry about the chicken little rant)
- Pstmann, on 12/16/2008, -1/+14Well they didn't take a loss then did they you fng prick!
If they bought it a year ago and sold it now then you can say they took a loss but since they bought it 20 years ago for probably a 1/4 of what they sold it for now it is called a huge profit dipsht.
Don't correct someone when you don't know what your talking! - FredFredrickson, on 12/16/2008, -0/+13Just a few more trillion to go before they are affordable again!
- inactive, on 12/16/2008, -4/+17***** THE PEOPLE WHO MADE BAD CHOICES!
Sorry but getting loans on bad decisions, hoping that they would never go down in value, is YOUR fault not everyone elses. Because of people allowed to make bad decisions... those people screwed with the economy.
Take their houses away and remind them that fools and their money are soon parted... fools!! - inactive, on 12/16/2008, -0/+12About two months ago, I said this was all good news for me, since I own my home outright, and want to buy another. I was buried so deep for just the suggestion...
The stock market tank, and housing tank are VERY good news, investment wise. Both my kids are getting stocks as gifts from me this year. - wifirewire2, on 12/16/2008, -0/+12I agree. People who bought a 350K 1400sq ft home in ***** are screwed b/c the home was never actually worth 350K...and now the same homes in the same community are selling brand-new for 120K
...but they did buy into the hype of ''real estate will always increase'' *****, my ex-roommate was a perfect example of the greedy / get-rich-quick mentality of the time.
So anyone in the negative equity mess has to foot some of the blame, but hopefully a hard lesson was learned. Bubbles are pretty easy to spot, especially ones on such a large scale. - MiddleAmerica, on 12/16/2008, -15/+27Actually the deregulation was all GOP legislation & all but one was done between 2001-2006 under total Republican control. There was one that was a GOP bill, but they convinced Clinton to eventually pass it.
And the GOP talking point of the Community Reinvestment Act is 100% propagandistic lies & has been well proven so by many credible sources. That legislation has been working just fine for 34 years & had nothing to do with the bubble or the crisis.
Bush Administration Weakened Lending Rules Before Crash
The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.
http://www.huffingtonpost.com/2008/12/01/bush-admi ...
McCain in March '08: Remove Regulations In Financial Markets
John McCain on the housing crisis just under six months ago: "Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital."
http://www.jedreport.com/2008/09/mccain-march-08-r ...
McCain defends deregulation, Obama blames deregulation (AP)
news.yahoo.com — Sen. John McCain defended deregulation on Wall Street even as he endorsed a $700 billion bailout of financial firms in an interview broadcast Sunday.
http://news.yahoo.com/s/ap/financial_meltdown_cand ...
Regulations Republicans Eliminated Causing Financial Crisis
Here are few: State Laws Against Predatory Lending, The Net Capital Rule, The Uptick Rule. And McCain has been touting the idea that more deregulation of industry would be part of his policy. That's worked out well so far, eh? Plus he has been stumping for deregulation of the healthcare system, because it worked out so well for the financial industry, seriously.
http://thinkprogress.org/wonkroom/2008/09/19/perin ...
GOP Was For Deregulation Before They Were Against It
Republicans deregulated markets causin the financial meltdown, then 6 months ago unveiled new plans for more deregulation of financial institutions, which McCain has supported on the campaign trail, but now GOPers have all flip-flopped.
http://thinkprogress.org/wonkroom/2008/09/19/dereg ...
McCain: Let's fix healthcare the way we did banking
Sept. 20 -- An article about health care published in an obscure journal led to a new skirmish Saturday between the campaigns of Democrat Barack Obama and Republican John McCain over who should be trusted with the ailing economy.
http://www.washingtonpost.com/wp-dyn/content/artic ...
The real reason behind the economic crises
http://www.rockhate.com/unofficial/mccain.htm
- baphomet, on 12/16/2008, -3/+14The "Free Market" has not existed in the U.S. for quite some time.
Freddy Mac and Fannie Mae are NOT free market. They are the government and they existed to help people own homes. Ditto for the Community Reinvestment Act, which was supposed to help people own homes. Ditto for the Federal Reserve. It sets the price of money via the interest rate. By cutting the rate to the absurd level of 1% in the 2000's Greenspan created a bubble economy to prevent the crash of the Dot Coms. The Fed wanted this, this is why Greenspan said that ARM loans were a good idea.
All of these things are manipulations of the economy, and it was BECAUSE OF GOVERNMENT, not the lack of it, which created the housing bubble. The government created the cheap credit that allowed everyone to get a mortgage, which increased the demand for housing, which increased the prices of houses. From there, the bubble really begins because people see a way to make even more money through the real estate market and then the system feeds on itself.
We can try all we want to regulate the EFFECTS of the government's meddling of the economy (which is what, in reality, what everyone seems to think is the answer), but the answer is only breached when we change the ROOT CAUSE, which is the government in the first place.
Greed and all other forms of human weakness has always existed, but when the government takes away the natural risks of the free market (via the Fed, the CRA, Freddy, Fannie, FDIC, fractional reserve lending, etc.) then things become unstable and chaotic. - Nerys, on 12/16/2008, -0/+11EXACTLY. they are not losing home value. They are losing "false" high value on homes that never should have been worth that much.
Home prices are totally out of line with reality. I would say homes prices need to fall by roughly 50% to even approach reality. - drlha, on 12/16/2008, -2/+13However, the personal responsibility of the people who got bad mortgages is only part of the equation, its not like the banks were blameless in giving out these mortgages. They should have known better when assessing people's mortgage applications, rather than just desperately getting signatures on paper and then selling off the risks to other investors.
- rrife, on 12/16/2008, -0/+11The home is only worth what somebody is willing to pay for it....this problem isn't caused by any political leaders, its caused by consumers.
- rcollamore, on 12/16/2008, -1/+11i wish the word "pnw" would die
- duderdude, on 12/16/2008, -1/+11How about increasing funding for math education, that's what would really prevent this from happening again.
- shipwreck58, on 12/16/2008, -0/+10The reality is that the houses were overvalued from the git-go and they are now simply returning to their actual REAL value.
- FredFredrickson, on 12/16/2008, -0/+10Kinda like Apple's stock.
- LanceUppercut, on 12/16/2008, -2/+12I put spinners on my van down by the river. Value doubled.
- inactive, on 12/16/2008, -0/+10I spend like a month researching before I decided to buy my first laptop. One ***** month of research to make sure my $1,500 do not go down the drain. Retards who take out $500,000 loans without doing research, studying market, understanding true meaning of compound interest rates, APR, etc. deserve to get *****.
- ColonelJessup, on 12/16/2008, -2/+12Here we go again with the digg.com economic professors.................................
- vizeroth, on 12/16/2008, -0/+10http://graphics8.nytimes.com/images/2006/08/26/wee ...
That one said it all for me, and that was over 2 years ago. Houses are still over-valued 2-4x in my area, or inflation REALLY sucks right now. - Autodidaddict, on 12/16/2008, -0/+9Some people getting loans were irresponsible. They were ignorant.
Some of the banks issuing these loans because they would just package and sell them to other banks and investors and hence not care of the loan applicant was a huge default risk were predatory and criminal.
I prefer neither, but would rather have ignorant irresponsibility than predatory irresponsibility. - Pstmann, on 12/16/2008, -0/+9That's fine. maybe if there are enough home foreclosures people who actually work for a living can afford to buy one.
- asskicker32, on 12/16/2008, -1/+10YES! Something tangible loses a perceived value which 99% of the homeowners wont even notice because they wont sell
Horray for sensationalist journalism and economics! - MiddleAmerica, on 12/16/2008, -5/+14Second Mortgage Disaster Looming On The Horizon - 60 Minutes
http://digg.com/business_finance/Second_Mortgage_D ...
An absolute must watch!
This is what we get when we deregulate the banking industry for the sake of "Free Market" ideology. - JonForTheWin, on 12/16/2008, -0/+9The prices were fixed. You can't "lose" something that isn't there to begin with.
- korvan504521, on 12/16/2008, -1/+10all of this has happened before, and will happen again.
- NoLibertarians, on 12/16/2008, -0/+8You don't lose anything on a home until you sell it..So yes, for some it lost it's value..But for most they will make a ton of money on homes they have purchased and stayed in for a decent period of time
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