yeh, way to let'm have it

- submitted by Anonymous on 03/07/2008

yeh, way to let'm have it dude! these so called victims need some reality checking.

c'mon

- submitted by Anonymous on 03/07/2008

Look, borrowing money is not always irresponsible! if your house has steady value, what's wrong with borrowing against it? this writer acts like any and all debt is bad. i imagine she's too old to have grown up in the depression but sometimes she kind of seems like it!

The Doyles and their ilk

- submitted by Anonymous on 03/07/2008

The Doyles and their ilk obviously used their houses as ATM to help finance out-of-control spending. All the time they were flashing their expensive toys at those of us who were responsible with our money. Now they got their comeuppance and I feel no sympathy toward them, though perhaps a bit of schadenfreude.

to the last commenter -- i

- submitted by getreal on 03/07/2008

to the last commenter -- i don't know if writer thinks all borrowing is bad. i'm guessing not. but what is bad -- & stupid -- is borrowing too much or borrowing more than you can afford if some pretty expected things happen, like changing interest rates or the housing bubble popping or your not having any savings or funds to deal with even short term troubles. lawyers & educated people made a lot of stupid decisions. i don't wish them poorly but it does bug that some of the people who couldn't resist upgrading their houses or buying expensive toys are now acting like victims. not everybody is a victim. some were just plain irresponsible and reckless.

Thanks

- submitted by JimmyL on 03/08/2008

Thanks for this post. It's quite obvious that stupidity plays a role in this somewhere...

If you're a drudge fan: <a href="http://www.drudgetracker.com">drudgetracker.com</a>

As someone who sold his

- submitted by busdrivermike on 03/08/2008

As someone who sold his house in 2004, I wonder why I need to pay taxes to support other people's bad decisions.

The reason real estate costs so much is because the average person has had access to cheap money. People borrowed the most they could, thinking that they could leverage a large investments into ever more equity.

That train has stopped. The question becomes what happens when house values go down so much it starts to effect the so-called smart investor. Don't think it cannot happen to you too. Banks are simply not loaning money. Banks are taking huge hits on their portfolio's. I believe this is just the beginning

THANK YOU GOD

- submitted by edstate on 03/08/2008

I was starting to feel like the only one who felt this way. A cheat sheet for the masses: Life is not fair. Life is usually kindof hard, and you have to pay attention. If something sounds too good to be true ("always goes up! @2006" "it's a NEW economy! @1999") Just because everyone's doing it doesn't mean it's a good idea. Credit is a powerful thing. Use it if you have to, but with reservations. A home loan is a form of credit. A student loan is a form of credit. A home is not an ATM machine. Don't be an idiot. ... Yup, that pretty much covers it. e

Housing is the only way to build wealth

- submitted by RE.Agent on 03/08/2008

It's a new paradigm, and everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.

Renters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas.

This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.

real victims

- submitted by rawstock on 03/08/2008

the real victims are those who paid (particularly those who continue to pay, on time and in full) for real estate in good faith but at artificially inflated prices. those of us who actually follow through on our commitments will get no bail outs, no sympathy articles in the NY Times ...

by the way, i believe there is a specific term for those you're describing: "Baby Boomer". what's wrong with our economy? look no further than the greediest, most self-entitled generation in world history.

To the general populace

- submitted by Debt free on 03/08/2008

Borrowing money costs money. The general population is surprisingly dumb. I would borrow as much as I could too if I didn't understand what it was costing me.

The best debt is no debt. Would you really buy that TV if you knew what is was really costing you. Same thing applies to your home equity loan.

Don't worry, there's a product for you. The reverse mortgage. Heck of a deal.

Inflated Market

- submitted by Buyers Advocate on 03/08/2008

Real Estate brokers make a ridiculously high commission for doing next to nothing.

Home prices are so inflated because the the corrupt real estate industry.

New services are starting to surface as the industry merges with the internet. Fees will be less which will help stabilize the market and lessen the impact of future bubbles.

Your 300k home needs to sell for at least 321k to counteract fees in the current system. How long do you have to own your home for it to appreciate to what you bought it for?

www.webdigs.com is one of many sites that are turning up where they openly advertise refunding portions of the standard buyers agents commission. Listing your home with them gives you a significant discount as well. It's only a matter of time.

Read the same article a while ago...

- submitted by Duh on 03/08/2008

I felt the same way. I like at the VERY END of the article they metion the whole 'put money into companies that are now bankrupt', but the whole rest of the article makes it sound like they did all of this for their child's education, which is BS.

Great Article

- submitted by Living Within My Means on 03/08/2008

There are so many disclosures and paperwork that needs to be read and filled out when you sign a mortgage. By law banks have to disclose interest rates and the history of the prime rate. I think some banks are partially to blame since some of them were very tricky about their mortgage practices (i.e.,Rock Financial/Quicken Loans), but I think if people had more common sense they would realize they were getting into something they could not afford. Did they honestly think their house value was going to continue to grow and grow? Here's a good idea lets take out a mortgage and invest the money in risky stocks and not have a backup plan.

Also, ever hear of student loans? They are tax deductable, do not accrue interest until graduation, and have lower interest rates than mortgages. Also, you are not putting your house on the line for a student loan. Lack of common sense, greed, and stupidity have caused this 'crises' that never should have occurred.

irresponsible debt

- submitted by Ethan on 03/08/2008

In reponse to the 2nd comment. The only difference between responsible and irresponsible debt is how good the economy is doing. If our "victim" had not refinanced his house, he would have paid off 10 years of his mortgage, have a very low, compared to his current, monthly payment. He would also have a good half a million in equity on his house. Event with a bad economy he would be sitting large. Borrowing money to invest is idiotic. It's called leverage and it is risky not reponsible.

Poor you...

- submitted by WriterWriter on 03/08/2008

I am a mortgage agent and credit guide and I totally agree with this point of view. Too many people do not understand - choose not to understand - the point of refinance.

Refinance means you're already in trouble; your credit cards are maxed and your interest payments are eating you alive; it means that you're WAY overspending.

If you're refinancing a bunch of times, you are really, really in trouble, because you're obviously not learning your lesson AND you're piling on more debt to you problem.

The point of refinance is to lower your interest payments so that you can PAY OFF debt, not add to it.

If you're not able to pay off your bills EVERY month, you are living above your means. Period. No excuses.

You must understand the difference between needs and wants. You need a car. You do NOT need a 2008 mercedes.

Anyway, I too have zero sympathy for those who overspend and who are cavalier with their money. They are succumbing to the Darwinian Survival of the Fittest of the financial world.

Great article, I feel the

- submitted by Perfect! on 03/08/2008

Great article, I feel the same way! But what's going to suck is when we, the responsible people, are going to pay for those morons (higher inflation, almost no interest for our money market accounts, higher taxes to bail them out, etc.)

I think the government should stay out of helping those greedy idiots.

wow

- submitted by Anonymous on 03/09/2008

ok not even about the article, but some of these responses are crazy. The biggest problem with americas personal finances is that there are no financial education courses in school. The average american spends more time watching tv in a day than they do planning for their financial futures in a year. Judging from many of your comments, I take it not many of you know much about money either. Also leveraging a house on a sound, well investigated investment can sometimes be a profitable minor risk. It is best however to do it with a piece of investment real estate and not your permanent residence.

Idiots

- submitted by Smozer on 03/09/2008

Figures. Keep on borrowing money and thinking that it will never catch up. I bet they hate the whole idea of welfare, yet will insist that it is the government's responsibility to bail them out....well the govt probably will :{

you guys are wackos, including author

- submitted by karl on 03/09/2008

we grew up in the 'you are special and can accomplish anything you want' erra thus everyone feels when someone else hits bad times that its 'all their fault', 'no help or sympathy should be given to them', and so forth. because they are special and can accomplish anything too right? so it must be there fault, and there cant posibly be a reason for something bad to happen to someone that they didnt deserve.

we all make bad decisions. some of you tap the gass too much, some dont look both ways crossing the street everytime. but that doesnt mean its ok when the big red dump truck runs you ever without trying to avoid you. oh wait, you are all perfect, i forgot about that.

the fact is, we had a jobless recovery. companies made record profits but jobs nor sallary increased, so how is that possible? easy, americans were told (by the president included) to spend, and spend they did, thinking it was for the good. perhaps a lil post 911 indulgence also kicked in. but in short, they were able to make profits without giving back because people were going into dept, homes was the prime source of income.

eventually though, things have to right itself because people just cant absorb that kind of hit, and thats what we are doing now. it all started by some companies pushing interest rates up to pad their profit margins, but some people couldnt pay, defaulted, defaulting increased risks, companies want to ensure their profits thus increasing interest for the aditional risk. more people defaulted, more interest, more default, you get the cycle because you are well, all perfect.

i hope some homeless person stabs you in the gut for 20$ while you walk your child in the park~

karl

- submitted by linda keenan on 03/09/2008

im linda the writer well, even if i do get stabbed, i can take comfort in the fact that my child will inherit the money we have carefully saved for him. i certainly did NOT grow up even remotely in the environment you suggest. i did grow up in a thoroughly middle class (income-wise) home with two well-educated depression-era parents who taught me financial responsibility. i have enormous sympathy for people who hit rough times especially poor people with little education. i believe in social safety nets and even (gasp!) universal health care and would be willing to even pay more taxes to alleviate poverty and the middle class squeeze in this country. i selected these people among DOZENS ive read because they fit the criteria i set for people to roast: 6 figure incomes and above, people with professional jobs and graduate degrees. i personally know god knows how many highly educated people with excellent salaries who chose willful ignorance over the past 10 years because they wanted more and more stuff. this is not about the middle class or lower class. as for the people who blame the banks, absolutely. i also blame alan greenspan for his loose monetary policy and regulators for not enforcing proper lending. but there also has to be blame set on people who overspent, and overborrowed and should have known better. because as i have said in the past this is now affecting the entire nation: all of our 401ks, our housing values, services in our towns, loans to young people and students, anyone who saves (savings rate is down), i could go on and on. banks and government to blame, absolutely but individuals too.

Linda

- submitted by karl on 03/09/2008

Well said, but your blaming them for the economy which seems misguided. alan greenspan has many faults and i (personally) do not think he was the great fed he was made out to be, however, the housing problem and credit crunch is a problem of the system, not people taking out loans they cannot aford to pay back. the system of a bank borrowing cash from the fed, and imediatly having to pay it back by getting loans from money markets is the flaw. because the banks have to go through the money markets, the fed has no real control over mortgage rates (thats why mortgage rates are currently rising dispite fed cuts). furthermore, since banks are borrowing from other banks, they can not work with people in trouble by lowering the interest rate but still bringing in a profit, since they too have taken out the same loan.

your blame on the people draging down the economy is also incorect. our economy is just returning to where it should have been, the same economy of 2001 recesion. resources havent increased, efficiency hasnt gotten better, the only thing that ended the recesion was the booming housing market, which it was not a situation that could last anyways. your screaming and fretting about symptoms and not causes. the sub prime loans were not the cause of this, just that they were the first people standing in line to get hit. unless people start focusing on the real cause of the problems (increasing resources, renewable energy, greater efficiency, balancing the trade deficit) then the economy will never truely right itself. sure, we may put on virtual bandades and but when that unsustainable situation ends, people will cry foul at the victoms, like you right now.

Blaming the economy?

- submitted by Aloysis on 03/10/2008

You whiners need to get a life! No one promised that the housing market would continue to rise, and no one promised that the economy would be in good shape forever. Do these people live with their heads in the sand? Sure, it's nice when housing prices rise and homeowners see their biggest purchase worth more. But there are no guarantees and EVERYONE SHOULD KNOW THAT. People like Don should use an ounce of common sense and think before they borrow their sorry lives away. What did he think his house would be worth someday - $2 million? $5 million? He is where he is because of greed, pure and simple.

It is our fault!

- submitted by Dr. Garcia on 03/10/2008

Look, this is not something that the Government needed to intervene in! This was all about us silly home owners that were either hoodwinked, or misunderstood the type of loan(s) we were getting.

Bottom line, we need to suffer for our lack of indiscretion...not the American public!

Our leadership has lost it's way, thinking that we just throw money at resolving problems that are not the responsibility of the American Government!

We don't need a "Big Daddy" Government, we need loan burdened citizens, who freely took the money, to be held responsible for our own finances.

E Pluribus Unum

Suckers all...

- submitted by PropheticWarrior on 03/10/2008

Some of these folks are so far over their means that they have no clue. They've bought into the illusion that they need to spend, spend, spend and that he who dies with the most toys wins. Nah, if you die with the most toys, I'll just buy them at auction, cheap. You're dead and now I have the toys.

And these same idiots want me to feel sorry for them and bail them out because they're too stupid to stop spending and such. Nah, I say they need to suffer the consequences of their actions. Them and the banks that foolishly loaned them more money than they could repay.

bankers are at fault

- submitted by observer on 03/10/2008

In Congressional hearings on C-Span this morning, it was pointed out that there was a change in the way lenders lent, and it began with a change in vocabulary. High Risk mortgages were re-named Sub-Prime mortgages, and were marketed aggressively by CEO who profited from volume, not quality of loans. The cure for a bad loan is bancruptcy, but sadly, many persons who would have qualified for good rates got sucked into the bad rate loans designed for people with high credit risk. The regulators let this bubble grow, so some fat cats could make money; when the bubble burst, the little guy gets hurt. And some not so little guys, like mortgage lenders. The CEOs get to keep all their inflated compensation. Dartmouth magazine had an cartoon showing a fat banker and a tiny borrower in a sinking boat, with the fat banker shaking his finger at and blaming the borrowers. This crisis is a a result of a failure of sound public policy, adequte disclosure, and, of course, borrowers being seduced by lenders who should have known better.

Sick

- submitted by Anonymous on 03/10/2008

This makes me sick. What is the problem that the daughter can't finance her own college experience? She has no excuse. I am getting ready to graduate college with my BA in Anthropology. I have maintained a 3.5 GPA, and I have worked full-time, took full-time course loads and I have a 6 year old child. If I can manage my time and get this done and paid for without dropping dead, the daugter can too. How on earth can this guy not pay his bills if he is making 6 figures a year? What is he buying and why doesn't sell some of his material junk to pay off his debt?

Who is the idiot? Don or

- submitted by The Responsible Idiot. is....ME on 03/10/2008

Who is the idiot? Don or the banks that are gonna be left holding an empty bag? Nahh, it's you and me who didn't spend money like it was going out of style. Don and the bank are going to be bailed out by suckers like me who did the responsible thing. Don had his day, spent it and enjoyed and so did the bankers and mortgage brokers with the profits from Don's transactions. I say to heck with all of them...I've done the responsible thing, borrowed what I could and REFUSE TO PAY FOR IDIOTIC BORROWERS AND LENDERS. Leave me to my responsible money and let them go cry in their empty bag.

The Joneses and their ilk..........

- submitted by Bwahahahahahahaha on 03/10/2008

.......pretty much consumer driven dumbasses. What is the single biggest investment you have? Duh, could it be your home? What kind of moron constantly borrows against that? Even better what kind of dumbass refinances to an ARM? Happily living in an older townhouse that cost us $80K back in the 80's, peaked at a ridiculous 392K value 18 months ago and is now down around 300K..........and we have never refinanced it!

don't bail-out the banks & fin. instutions

- submitted by Anonymous on 03/10/2008

Yep, conspicuous consumption got these people in trouble!

More importantly, we the taxpayers, should NOT bail-out any bank or other financial institution who played this "musical chairs".

Having the FHA or any other quasi-governmental agency bail-out homeowners and financial institutions is morally wrong.

Mish has been predicting this for over 3-years:

http://globaleconomicanalysis.blogspot.com/

tHIS Is refreshing, to hear

- submitted by Anonymous on 03/11/2008

tHIS Is refreshing, to hear a voice that says some people are at fault too. god, i hate all the crying and whining among people who stupidly borrowed borrowed borrowed and now wonder how things got bad. some of these idiots are MBAs and other so called educated people. do i want them to suffer? no. but i do want them to shut up and stop acting like they're naive victims

Yep

- submitted by Jeff on 03/28/2008

I love all these people coming out of the woodwork lately who are poor desperate people making $100k a year and living in the $450k house with a couple of $50k cars in the garage. Newest reason (excuse) finances suck - "My life has gone down the tubes because gas went from $1.25 to $3.25..." Wah, wah, wah, it sucks because you never had more than $30 in your pocket after mortgage and car payments. I hope gas prices go a little higher, which will lead to fewer dickheads on the road.

home loan

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