So people are forgiven for not using some common sense. One should have the ability to know if they can afford a payment or not. And one should be layed blame when they cannot... I bout my 2nd home in 04 before the crash and was presented with some cray properties and financing. None of it added up to make sense at all. In the end I bought in my price range because that added up to me.

People need to be held accountable for their actions, the consumer is as much to blame as anyone!!

I don't think he is saying otherwise. He is not taking the blame away from the consumer (moron who bought more house then he could afford), after all the moron paid for his stupidity (best case had to sell the house at a loss and buy a smaller one, worst case he is homeless and on the street ). I think his point was that the realtor who sold a 500k home to the guy that could only afford a 300k home made a larger commission and no repercussions, the banker that approved the loan at the time got the bigger bonus at the end of the year.... and the CEO's who pushed this got bailed out. On the other hand to properly calculate financing is hard and most people can’t even add correctly, so what chance do they have when everyone is telling them "you can afford it".

The issue is everyone is way too short sighted and greedy and individualistic thinking

Going way off topic folks......

People go to the bank and apply for loans to know whether or not they can afford the payment. Its like saying people should know whether or not they will survive heart surgery. We "hire a pro" for things were not familiar with. This puts the responsibility on the bank. The government allowed the bank to approve risky loans so again it goes all the way back to the administration that initiated it.

Another funny thing about the mortgage crisis...You didn't hear anybody complaining when the equity in their home was going up 100k per year.  Some of these people were making more money on living in their house every year than they were at their jobs.

It had to stop somewhere.  Your house can't continue to increase at that rate year after year.  The market was essentially beginning to price "the average Joe" out of the dream of home ownership.  

When you've got people paying a Million Dollars for a home in California that is 900 sq ft, and is 2 blocks away from the ghetto there is something wrong.  

The mortgage crisis really isn't a crisis as much as it is a market correction.  It's just gonna be a 13 yr. market correction.

So, fast forward to a person who in 2006 bought a home at the height of the market.  Let's say he paid 400k. The house is now worth approx 50% of the purchase value.  So he's 200k upside down.  And he's still paying taxes on a home that's appraised at 400k.  It doesn't make sense.

It will take him 13 years for him to get back to his purchase price. Financially it's smarter to let the house go,  3 years after the foreclosure he can buy another home at the going market value, and at that point the market is starting to recover, but slowly.

So now it's 2024, the guy who held onto his house is is "back to even" for what he paid for it, he's 18 years into a mortgage, he's got 12 left, he's not going to have any real equity in his home and he's about to retire. 

The guy who let his house go back to the bank, saves the money that he would have paid into that home and gets back into the market when the market shows signs of stabilizing and growing.  He's out of foreclosure in 3 years, and hasn't paid 400k for a house worth 200k.

I think we sometimes view these people who are walking away from their homes as people who can't sfford them. It's not always the case, I think it's more of people saying "I can walk away from this home, and get a very similar home in 3 years for 50% less."

Financially what your saying makes sense. However, just because you f'd up and bought a house at the top of the market doesn't mean you should just get to skip out on your contract you agreed to.

I think the funniest part of this was the fact that the most American made full size truck is a Toyota and the least is a Ford.

Well said. I'd add that crap dressed as a rose is still crap.

Amazing to me how many people I know think that crap dressed as a rose is, in fact, a rose.

+1.

This is part of the gamble that the banks made. Historically people will pay their mortgage to keep their house even when they are struggling financially.

People (the number of them) choosing to walk away from upside down homes is a new phenomenon. They accept the loss, file bankruptcy and in a few years they will buy a new house with a mortgage that wont double over night.

The only punishment will be that they pay a few points more on the loan next time and they have to finance less expensive vehicles for a year or two.

Exactly, I'm not saying I agree with the mentality, but I understand where they're coming from.   


I was only trying to make the point of these people "being dumb".  Sure alot of them were dumb, but there are also multi-million dollar homes that people have walked away from.  Those people certainly aren't dumb, otherwise they wouldn't have been living in a multi-million dollar home in the first place.  

In the end, Americans tend to view their homes like a part of them.  But in all reality, it's just another posession.   For the average Joe, the thought of being $200k upside down on a mortgage is unbearable. So they leave.

And what percentage of the profits on a Toyota stay in America?  What percentage of the profits on a Ford stay in America?  That's the point, not where the door handles come from.  

Homes were appreciating at unprecedented rates. House wives jumped in on flipping houses because a coat of paint and some new floors earned them five figure profits. Banks and buyers were operating on the idea that the houses would be flipped before the rates changed and drove the payments up (to where they really should have been).

Others were taking their skyrocketing equity back out of their home and investing it in wall street because it was giving a bigger return than their bank was charging.

But eventually the bottom fell out of the market. Only an idiot thought it could keep going, and there were a lot of idiots out there. Now that the bubble has imploded, and prices are shaking out to where they belong, people own houses that they cant recoup what they paid, for several years. Maybe more than a decade. Walking away actually makes sense in many cases.

No, I think the point is how much money from both manufacturers goes back to employing people in America

I totally disagree with you on this. And I'd bet all of the American factory workers in the USA working at foreign-owned automobile factories here do too. What difference does it make where the profits go to? If Toyota (or any other foreign company that builds a factory in the USA) employs thousands of US workers, how is this a bad thing??

If Ford moves a plant to Mexico and builds cars there, they don't ship the US factory workers to Mexico to work in that factory. Nope, they all become unemployed!

Gotta say that I love to hear people complain on one side about corporate bail outs and then turn around and state how they support walking away when your upside down in your mortgage. Is that not a bail out also? Maybe I'm one of those idiots, but what ever happened to just paying your debts?

What about buying a new car, once you leave the lot your upside down, even if you put a huge down payment on it. It all boils down to value.

I'm not attacking anyone here, but one thing that makes my blood boil is this new American way of thinking that we all deserve a safety net. If it gets to dicy just jump out and let someone else cover the mess..

We can't continue to act as children, knowing that no matter what happens our parents will be there to pick us up. We need to start pointing the finger in the mirror and sticking out the bad with the good.

Hard work and personal sacrifice seems to be slipping with the times.