Did Generation X Cause the Housing Crisis?


By Call it Crazy   Follow   Wed, 2 Jan 2013, 12:09pm   3,136 views   81 comments
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The housing crisis resulted in a great deal of finger pointing. Politicians blamed Wall Street, Wall Street blamed government, and each political party blamed the other political party. What gets lost in the drama of political theater is that real people signed mortgages that could not be afforded. Somewhere in the buck-passing, we are left to wonder what happened and how financial consumers can avoid future foreclosure catastrophes.

Generation X was Most to Blame. The largest percentage of households in foreclosure belonged to those in Generation X—in particular, Gen-Xers who had high average household income ($59,500) and years of education (14.8 years). It seems counter intuitive that a well-educated and affluent group of families would lead the foreclosure charge. Yet this group of households made up more than 1 in 10 foreclosures. How do affluent families end up in foreclosure?

Mortgages with High Loan-to-Value. The size of the down payment at closing can vary greatly. FHA loans can require as little as 2.5 percent of the purchase price. A review of mortgages in foreclosure found that the median mortgage had a loan-to-value of about 65 percent. Mortgages in foreclosure had a median of 96 percent.

http://money.usnews.com/money/blogs/my-money/2013/01/02/did-generation-x-cause-the-housing-crisis

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  1. Dan8267


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    42   3:15pm Thu 3 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    Kevin says

    In reality, the larger the value of x, the bigger the size of your bank account needs to be if you want to keep them in that range.

    I actually had another formula for women. It's

    f(ageOfWoman) = $20,000 * ageOfWoman

    in year 2000 dollars. That's how much the guy has to earn to maintain the relationship.

    Of course, for guys it just makes sense to date younger women. More beautiful and less expensive.

  2. Kevin


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    43   4:46pm Thu 3 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    Dan8267 says

    Of course, for guys it just makes sense to date younger women. More beautiful and less expensive.

    When you're 60, try telling me that it's less expensive to date a 25 year old than a 60 year old.

    Your formula is terrible.

  3. Mark D


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    44   4:57pm Thu 3 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    it was the baby boomers in congress that deregulated the financial industry.
    /thread

  4. Dan8267


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    45   5:47pm Thu 3 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    Kevin says

    When you're 60, try telling me that it's less expensive to date a 25 year old than a 60 year old.

    Your formula is terrible.

    Evidently you have never lived in Boca.

  5. APOCALYPSEFUCKisShostikovitch


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    46   5:54pm Thu 3 Jan 2013   Share   Quote   Permalink   Like (2)   Dislike  

    Fucking asshole Gen-X kids - they were supposed to buy that overpriced 3/2, and keep it even when it's real valuation falls to 1/10th their buy price, so I could retire to Asia Minor and live like Caligula by selling the 3 rental gold mines I was going to sell to have my Anatolian empire and vacation castles in Scotland and Estonia! There out to be a law!

  6. ELC


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    47   6:34pm Thu 3 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    errc says

    ((X/2) +7)

    if X>55 then X/3

  7. ELC


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    48   7:03pm Thu 3 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    Kevin says

    When you're 60, try telling me that it's less expensive to date a 25 year old than a 60 year old.

    25 year olds are use to dating broke-ass losers.

  8. C Boy


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    49   7:42pm Thu 3 Jan 2013   Share   Quote   Permalink   Like (2)   Dislike  

    ELC says

    Kevin says

    When you're 60, try telling me that it's less expensive to date a 25 year old than a 60 year old.

    25 year olds are use to dating broke-ass losers.

    Losers that want them to pay for dinner/drinks and have no manners. Acting like a gentleman goes a long ways.

  9. Moderate Infidel


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    50   7:48pm Thu 3 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    I'm a boomer cusper/Gen x'r and yes, we caused it.
    Whatcha gonna do about it bitxhes?

  10. Dan8267


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    51   9:07pm Thu 3 Jan 2013   Share   Quote   Permalink   Like (2)   Dislike  

    Dan8267 says

    errc says

    ((X/2) +7)

    Damn, I've used that formula, too, except with 8 instead of 7.

    Big announcement. After much research and intense mathematical work, I have perfected the age formula.

    A spreadsheet rendering the above graph and showing specific appropriate woman ages for men form 10 to 110 can be download here.

    For information about the various physical and mathematical constants, click one of the links below.
    Avogadro's Number
    Universal Gravity Constant
    Speed of Light, c
    Soldner's Constant
    Base of Natural Logarithms, e
    Ratio of Circumference to Diameter, π
    Golden Ratio, Φ

    It took a lot of effort to deduce this fundamental equation of the universe, but now we can explain why men should date younger women using only the natural physical and mathematical constants of our universe. For such an elegant equation with only natural terms to express the dating age correlations so precisely that no observation has every contradicted the predicted values indicates that a fundamental law of nature must indeed be responsible for these values.

    The equation so gracefully combines elements of geometry, physics, and chemistry that the only question remains is in which field shall I receive the Noble Prize for this equation. Perhaps all three?

  11. Kevin


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    52   9:23pm Thu 3 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    ELC says

    Kevin says

    When you're 60, try telling me that it's less expensive to date a 25 year old than a 60 year old.

    25 year olds are use to dating broke-ass losers.

    Yeah, but not ones wearing diapers who can't get it up.

  12. bgamall4


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    53   12:37am Fri 4 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike   Protected  

    varmint says

    Gen X are 15% of the population and had 10% of the foreclosures. Get em!

    That still doesn't mean they were the cause. The cause was lack of underwriting, you know, the job of the banks. They knew they could get awayMark D says

    it was the baby boomers in congress that deregulated the financial industry.

    /thread

    That is BS. The idea that we divide boomers from others is foolish. The central bankers deregulated the financial system because big finance figured out how to fleece regular people. It started at Basel 2 in 1998 and then with the repeal of Glass-Steagall and the deregulating of the derivative swaps. Phil Gramm led the repeal of Glass-Steagall and was born in 1942, and Wendy Gramm led the deregulation of the derivatives and insurance against the crap CDO's. She was born in 1945.

    The boomers were born from 1946-1964.

  13. ELC


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    54   5:35am Fri 4 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike  

    bgamall4 says

    The boomers were born from 1946-1964

    I don't know where the Census Bureau gets 1964. There's no way the post war boom or it's influence lasted till 1964. Pure nonsense.

  14. C Boy


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    55   6:22am Fri 4 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike  

    ELC says

    bgamall4 says

    The boomers were born from 1946-1964

    I don't know where the Census Bureau gets 1964. There's no way the post war boom or it's influence lasted till 1964. Pure nonsense.

    18 years after the end of WWII is when the birthdate declined and the baby boom was over. Also when the Pill became available.

  15. C Boy


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    56   6:23am Fri 4 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike  

    Wasnt Greenspan part of the "Greatest Generation"?

  16. zzyzzx


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    57   6:51am Fri 4 Jan 2013   Share   Quote   Permalink   Like   Dislike (1)  

    ELC says

    25 year olds are use to dating broke-ass losers.

    That really depends upon how hot they are.

  17. Dan8267


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    58   7:49am Fri 4 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike  

    bgamall4 says

    varmint says

    Gen X are 15% of the population and had 10% of the foreclosures. Get em!

    That still doesn't mean they were the cause

    varmint was being sarcastic. His point was that clearly Gen X participated less in the bubble and foreclosure mess than their fair share based on the percentage of potential home-owners who belong to Gen X.

  18. errc


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    59   7:58am Fri 4 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    Next you're going to tell me that the popping of the bubble was a black swan event lmao

    Let me put on my ohshitimsosurprised face. You mean to tell me that house prices don't always go up? That there has to be some connection to reality of wages and prices? Bloody fucking hell,,,that's just bullocks. My realtor says otherwise

  19. bgamall4


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    60   8:56am Fri 4 Jan 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    ELC says

    I don't know where the Census Bureau gets 1964. There's no way the post war boom or it's influence lasted till 1964. Pure nonsense.

    I don't know. And isn't that a long generation? I am not into that stuff.

  20. ELC


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    61   11:08am Fri 4 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    Kevin says

    Yeah, but not ones wearing diapers who can't get it up.

    If Hugh Hefner can get it up ANYONE can!

  21. ELC


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    62   11:19am Fri 4 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    C Boy says

    Losers that want them to pay for dinner/drinks and have no manners. Acting like a gentleman goes a long ways.

    The young ones are more impressed by things like cars too. And I'm not talking real expensive cars either. A Viper or a Vette is all you need. Older ones try to pretend it doesn't matter.

  22. Peter P


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    63   3:34pm Sat 5 Jan 2013   Share   Quote   Permalink   Like   Dislike (1)   Protected  

    C Boy says

    Losers that want them to pay for dinner/drinks and have no manners. Acting like a gentleman goes a long ways.

    The art of being a gentleman is now gone with the wind.

  23. Peter P


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    64   3:34pm Sat 5 Jan 2013   Share   Quote   Permalink   Like   Dislike (1)   Protected  

    ELC says

    The young ones are more impressed by things like cars too. And I'm not talking real expensive cars either. A Viper or a Vette is all you need. Older ones try to pretend it doesn't matter.

    If I were a girl I would only be impressed by cars with contrast-stitchings in the seats.

  24. thomaswong.1986


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    65   6:46pm Sat 5 Jan 2013   Share   Quote   Permalink   Like   Dislike (1)  

    Call it Crazy says

    Generation X was Most to Blame. The largest percentage of households in foreclosure belonged to those in Generation X—in particular, Gen-Xers who had high average household income ($59,500) and years of education (14.8 years). It seems counter intuitive that a well-educated and affluent group of families would lead the foreclosure charge. Yet this group of households made up more than 1 in 10 foreclosures. How do affluent families end up in foreclosure?

    well for one.. many ignored history that home prices do actually go down. certainly heard many times over "RE never goes down".. which it actual did back in early 80s and 90s.

    regardless history even in SFBA.... they ignored it thinking they were immune from any downturns. I certainly dont know what the GX were ignorant on how homes like in SoCal went down by 40-50% by 1991-95. It was a deep deep correction. Many others were hell bent on RE as a path to wealth, Its all odd how many ignored recent history.

  25. bgamall4


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    66   7:32pm Sat 5 Jan 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    thomaswong.1986 says

    well for one.. many ignored history that home prices do actually go down. certainly heard many times over "RE never goes down".. which it actual did back in early 80s and 90s.

    It only went down in a few places. It went down a little bit. The S and L crisis did drop some. But for the most part, housing has not gone down in value in most places since the 1930's Wong.

    And remember, Wong, the drop in So Cal was a generation removed from the drop in the 1990's.

  26. bgamall4


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    67   7:48pm Sat 5 Jan 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    thomaswong.1986 says

    well for one.. many ignored history that home prices do actually go down. certainly heard many times over "RE never goes down".. which it actual did back in early 80s and 90s.

    Also, the housing market was not destablized in the 1990's. People could still get loans and there was not a credit crisis. You are mixing apples and oranges Wong. We did not have wages stagnating and easy money loans en masse. We had that in 2000-2010.

  27. thomaswong.1986


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    68   8:03pm Sat 5 Jan 2013   Share   Quote   Permalink   Like   Dislike (1)  

    bgamall4 says

    You are mixing apples and oranges Wong. We did not have wages stagnating and easy money loans en masse.

    In SV we had for the better part of the 90s wage stagnation.

    what happens when the market price of goods and services get slashed by 20,30,40%

    you dont exactly hand out salary increases during these years.

  28. bgamall4


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    69   8:33pm Sat 5 Jan 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    thomaswong.1986 says

    In SV we had for the better part of the 90s wage stagnation.

    In SV house prices didn't decline much in the 90's. And that is local. Wages increased in the 90's compared to the next decade.

  29. C Boy


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    70   8:47pm Sat 5 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    bgamall4 says

    thomaswong.1986 says

    well for one.. many ignored history that home prices do actually go down. certainly heard many times over "RE never goes down".. which it actual did back in early 80s and 90s.

    It only went down in a few places. It went down a little bit. The S and L crisis did drop some. But for the most part, housing has not gone down in value in most places since the 1930's Wong.

    And remember, Wong, the drop in So Cal was a generation removed from the drop in the 1990's.

    bgamall4 says

    thomaswong.1986 says

    well for one.. many ignored history that home prices do actually go down. certainly heard many times over "RE never goes down".. which it actual did back in early 80s and 90s.

    Also, the housing market was not destablized in the 1990's. People could still get loans and there was not a credit crisis. You are mixing apples and oranges Wong. We did not have wages stagnating and easy money loans en masse. We had that in 2000-2010.

    In Texas in 1985, my father's house was worth $75k. By 1990 it was worth $50k. It was not until 1998 that the house was again worth $75k.

    By 1990, almost every bank and savings and loan in Texas failed.

    As much as I disliked GHW Bush, he at least called up his attorney general Dick Thornburgh and told him to find the worst crooks in the S&L scandal and put them in jail. He put almost 1,000 bankers in jail.

    How many banker has Holder put in jail? ZERO. Obama has him raiding marijuana clinics and providing guns to Mexican drug gangs instead.

  30. thomaswong.1986


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    71   8:54pm Sat 5 Jan 2013   Share   Quote   Permalink   Like   Dislike (1)  

    bgamall4 says

    In SV house prices didn't decline much in the 90's.

    another Bubble Head jackass.. 30-40-50% was common. Are you now in denial we had over inflated prices (bubble) in the late 80s ?

    bgamall4 says

    And that is local. Wages increased in the 90's compared to the next decade.

    HA! yes.. 1998-2000 from the infusion of $100B
    coming from VCs who rec'd it from the top 1%.

    PWC Money Tree
    Historical Trend Data

    https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=historical

  31. thomaswong.1986


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    72   8:55pm Sat 5 Jan 2013   Share   Quote   Permalink   Like   Dislike (1)  

    C Boy says

    In Texas in 1985, my father's house was worth $75k. By 1990 it was worth $50k. It was not until 1998 that the house was again worth $75k.

    BG suffers from Amnesia!

  32. bgamall4


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    73   8:57pm Sat 5 Jan 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    C Boy says

    In Texas in 1985, my father's house was worth $75k. By 1990 it was worth $50k. It was not until 1998 that the house was again worth $75k.

    By 1990, almost every bank and savings and loan in Texas failed.

    Even with the S and L crisis, your house bounced back to the 1985 value. There was never a credit crisis and banks kept lending, except of course, the S and L's.

    George HW Bush put bankers in jail. However, the banking community is much more powerful now. They are immune from prosecution now. The reason is, the international financial cabal sanctioned the last housing bubble. It was created at Basel 2 in 1998.

    But HW Bush did not put Greenspan in jail, and he was responsible for the S and L crisis because he refused to stop the easy money loans. But those loans were small in comparison to the bubble in the 2000's.

  33. bgamall4


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    74   9:01pm Sat 5 Jan 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    Also, the Texas savings and loan debacle was an oil patch depression. And it happened in my home town of Coalinga California. But it was nothing like what we had in the housing bubble. It was small potatoes.

  34. thomaswong.1986


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    75   9:13pm Sat 5 Jan 2013   Share   Quote   Permalink   Like   Dislike (1)  

    http://www.rntl.net/history_of_a_housing_bubble.htm

    1993: It's definitely a buyer's market. Some people are saddened by the fact that current prices are 50% of what they were in the 1980's. The housing bust in Southern California is clearly negatively impacting the California economy and the national economy at large. Sellers are desperate to sell (and some people taking extreme measures like putting huge "for sale" signs on their lawns for passing planes to see). Folks who waited out the boom to buy at the bottom are being handsomely rewarded for their patience. Proof-positive of the contrarian investing style -- be greedy when everyone is fearful and fearful when everyone is greedy. The "slump" may be ending.

    Long Southland Housing Slump Finally Ending?
    DAVID W. MYERS; Los Angeles Times (pre-1997 Fulltext); Feb 10, 1993; pg. 1

    Housing Market Warming Up After 3-Year Slump Real estate: Optimism returns to Southland with rising sales. Number of homes on market is down.
    DAVID W. MYERS; Los Angeles Times (pre-1997 Fulltext); Feb 10, 1993; pg. 1

    A sad Westside story: Home prices have declined up to 50% since late 1980s
    Myers, David W; Los Angeles Times; May 28, 1993; D; pg. 1

  35. C Boy


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    76   10:18pm Sat 5 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike  

    bgamall4 says

    Also, the Texas savings and loan debacle was an oil patch depression. And it happened in my home town of Coalinga California. But it was nothing like what we had in the housing bubble. It was small potatoes.

    The S&L collapse was due to fraud and theft.

    Texas based Sunbelt Savings & Loan was known as Gunbelt Savings & Loan as it was revealed how execs spent the institutions money on yatchs, hookers, and cocaine.

    Don't forget that John McCain himself successfully put his career on the line to keep Charels Keating out of prison and Bush's son Neil was threatened with jail for his part in the collapse of Silverado Savings & Loan.

    Don't forget that the Resolution Trust Corporation was created to track down and confiscate stolen property and monies.

    Today the crooks get to keep thier ill gotten gains.

  36. C Boy


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    77   10:18pm Sat 5 Jan 2013   Share   Quote   Permalink   Like   Dislike  

  37. ELC


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    78   5:21am Sun 6 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    Peter P says

    If I were a girl I would only be impressed by cars with contrast-stitchings in the seats.

    Me too. Parents do a terrible job at teaching their children. That's the first thing they should be taught to look for.

  38. ELC


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    79   5:23am Sun 6 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    Peter P says

    The art of being a gentleman is now gone with the wind.

    Not for all of us. http://artofmanliness.com/

  39. bgamall4


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    80   8:53am Sun 6 Jan 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    thomaswong.1986 says

    Housing Market Warming Up After 3-Year Slump Real estate:

    Again, the 3 year slump was not a function of a credit crisis Wong. How long did the slump last this time? Is it over? Not sure. No one is sure. Shiller doesn't think the slump is over.

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    81   10:24am Sun 6 Jan 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    C Boy says

    Don't forget that John McCain himself successfully put his career on the line to keep Charels Keating out of prison and Bush's son Neil was threatened with jail for his part in the collapse of Silverado Savings & Loan.

    Don't forget that the Resolution Trust Corporation was created to track down and confiscate stolen property and monies.

    Today the crooks get to keep thier ill gotten gains.

    Yes, Bill Seidman, before he passed away, said the TBTF banks should be put into a resolution trust. It never happened.

    You may be interested in this article I wrote about Gramm and McCain. http://www.businessinsider.com/phil-gramm-legacy-mccains-evil-twin-2010-12

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