If you qualify for a loan, at a certain interest rate High or low, then you should be able to make the payments.
What of you lose your job or have to take a lower-paying job? Ideally that would work that way, but then life happens.
Its variable interest rates that cause the problem. Bottom line.
The tricky financing was a problem, but that's not a bottom line issue, there really is no bottom line with this mess, it was a culmination of several things, but w/o the insane appreciation of houses, lenders wouldn't have been able to be that creative or to lend to underqualified people. They've had balloon payment mortgages since before I was born, I recall my parents selling our first house to buyers with that option and recall them saying it was a stupid idea. So bad financing has been here for quite a while, certainly overused as of recently.
If interest rates were 3% permenantly why would the housing market burst?
They probably wouldn't, as everything would assume equalibrium around that. Buut we need a flexible interest rate, as when economic activity gets high, they raise it to avoid spiralling inflation, when they get sluggish, they lower it to increase activity. SO that's a nice thought, but not practical, as the interest rate is a tool.
I blame every greedy bastard in a $400K home with 2 new 40K vehicles in the driveway. You over extended yourself! Its your fault, and collectively you and your friends created this housing crisis.
I am not inflaming, but is this blame to avoid blaming Bush, a president you voted for? I'm thinking it is and he is the commander, he has to make sure the people don't get stupid, because we seem to find a way to do that. To sit back and let the lazze fare market spin out of control and say, 'look at those dumbshits fucking everything up' is obscene. ANALOGY: What if your wife found a GF to go out to bars with. She wanted you to stay home with the kids and she would go out. Right away you know this is probably going somewhere bad, but you are a guy that isn't into restrictions, so you let her be herself. 2 months later she's getting banged, you find out and tell her, 'It's all your fault, I gave you freedoms and you just ran amuck.' Point is, people will fuck themselves whenever you give them enough rope, so regulation is needed to some degree. Obviously the best thing to do as you discover she wants her freedom with her GF is to draw a compromise. Assess the situation and make some kind of rough rules and fair play for which to deal with this. She can go out once a month and must have her cellphone and be home by midnight. That's the same as keeping interest rates controlled, lending parameters regulated, etc. I realize it absolves Bush when we say, 'PERSONAL RESPONSIBILITY,' but it affects more tahn just the idiot getting burried by debt, it fucks us all, therefore regualtion is the key.
I just bought my house, and I bought one that we could afford on my salary alone without my wife working, because, if she cant work wtf would I do? If I cant work, then were screwed, but we would be screwed renting as well so its just risky to my credit history to own.
That's noble to yourself, your family and your country, but not everyone acts with such regard and since their actions affest us all, we need to regulate and that's where Bush, Greenspan, Congress, the banking system, and Bush's cabinet failed. This is a failure by the party that thinks we can operate under a lazze fare principle, can we say that that's BS by now, please?
You cant blame the government, they set numbers and regulations, its greedy people that ruin it.
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Well, they set the interest rate, a form of a regulation and that was the primary contributor. If people were lending outside of that regualtion, then yes, it was limited corruption, but this was a case of a bad regualtion giving way to other corrupt entities. See, the banks were making money hand over fist as house prices were going up so quickly, so they were able to allow for a lot of lattitude in lending practices....none of this would have been possible unless the interest rate had been so low, so long.
