patrick.net

I do know a guy (a real person) who sold, cashed out huge chunks of money and could have retired. But he had a gambling problem... He came to my house and complained about how it was all "lost" and I reminded him that he knew exactly where his money was.

The Vegas economy gained $150k from him in a few months. :) Stupid is, as stupid does (thanks, Forrest).

I can agree with not properly researching the area before buying, even during the housing boom, there are many areas that any fool could see they were undesirable regardless of price.
As for housing repairs, I can sympathize. Even with a good home inspector I got, there are many things he missed that are costing me $ to correct now. I have two wooden garage door, 10x10 feet each, one of them is seriously rotting on the on corner or the door. A garage door repair guy re-enforced the door with a bar that is secured into some better wood, but it's only a matter of time before the pulley line that lifts the door will rip out of the rotten wood. Got a quote from Lowes today to replace both doors, $3,500. There's been others, the Refrigerator died and had to be replace ($1,500), the geothermal system died 6 months after moving in, another 15k to replace. (the inspector pointed out that this may be an issue, we got the seller to certify the system was in running order and got some Cash back at closing, but I seriously under estimated replacement costs of this system)

Also timing is a issue, if we had waited to buy was could have gotten the 8k first time buyers tax credit, $4,500 tax credit for the geothermal system (we were capped at 2k for 2008), NJ would have cover 50% of the costs AND given us a 0% interest loan. (we got a 6% unsecured loan from the state, but no help with free $).

Yea - but Techie, you might not have been able to get THAT house if you'd waited. I think I recall how much you and the wife loved it. I sincerely hope that you are enjoying the place.

I can see how repairs can be frustrating - but that's not what I see as the problem. They're upside down, have buyer's remorse and even tho they can afford the place they'd like to bail. It's not the lender's fault the place isn't all that and a bag of chips... but the lender will end up on the losing end.

@Iggy

Certainly we are all ultimately responsible for our own choices. I just think it misses the point to be mad at homeowners. Some people do foolish things if given half a chance. But the worst that you can accuse them of is being foolish. Lenders on the other hand, are in the business of managing the ‘foolishness’ of borrowers. That is what underwriting guidelines are for.

So let me get this straight, you dont want to hold the buyers accountable but want to blame the lenders for tricking them into making a stupid decision. This statement would lead me to believe that if someone died today from lung cancer after smoking cigarettes for 40 years that you would also want to hold the cigarette company responsible for their death. I would also be led to believe that if a mother of 6 raised 4 engineers and 2 gangbangers that we should blame the mother and not the 2 gangbangers who made the choice to go down the wrong path.

Here is my point: People have a choice in their lives, it is not our fault these people did not make a responsible, informed decision before they bought their home.

@BAP

here’s my view. Barry is not collecting extra taxes from the buyer-vestor-flippers that made $200K in six months in 2006 ….. therefore, I feel no pitty for those other gamblers that got cought standing when the music stopped. You see, had the climb continued until this very day, these same greedy pukes as in this story would be standing around, looking at us lowly renters in a very smug fashion. Anyone agree?

Exactly, these folks would be looking down on us now had they sold at the right point and turned a profit. They would be the same people speeding by our tugboat in their jetski's splashing water all over our face. I dont have any empathy for these folks situation, not the banks that gave them the loans. I am starting to understand the point of this site much better through the dialogue I have been having with you folks. From what I have read, after the crash of 1929 banks stopped lending and the markets froze, unemployment rose. The solution was for the government to back bank loans with an insurance plan called FHA. LOL

Plain and simple, the requirements for FHA and any home loans need to change...but we know that is not going to happen because FHA was started to jump start the economy after the crash of 1929.

@Iggy

I am curious as to whether you are you going to blame Obama's $8,000 tax incentive when all these new homeowners lose their equity?..you realize these folks will have to sit on these homes for 10-15 years before their homes return to todays prices right?

@thunderlips

So, we obviously need regulation, so fair and well-considered laws and not fallible men, are in the driver’s seat. Laws can be changed if inadequate; Human Nature can’t.

Now, why would you as a conservative be a proponent of regulation?

*Jokingly* Leave the regulation and common sense thinking to me and Teddy Roosevelt who btw was a REPUBLICAN. Long live the progressives! **Jokingly**

"Yes people bought cars and some got boats and some got more crap - but does anyone know the actual dollar amount that was actually lost on frivolous stuff (and not on newer homes or remodels)."

Im sorry, but this isnt the Star Trek era were we can just ask a computer and get some answer in a minute or two. Our financial system doesn't track such complex transactions down to such levels.

Fact is in the 70s, home prices on the East Coast were much higher than SF Bay Area, which was primarily farm lands. We still had fruit canneries working 24/7 in Sunnyvale as late as '79.

Gas prices are actually lower than 1980s peak prices, they fell for 20 years
...http://zfacts.com/p/35.html

Ever since the Telecom deregulation, prices of product and services have fallen.
You have gizmos which cost a few dollars a year and provide free service.

wish i was lucky says

Does anyone know just exactly how many people actually took out tons of cash and then just kept it? I think a lot more people lost money buying another house or remodeling, and helping their kids buy homes. Yes people bought cars and some got boats and some got more crap - but does anyone know the actual dollar amount that was actually lost on frivolous stuff (and not on newer homes or remodels).

I don't know anyone who cashed out & kept it - in the heyday everyone was re-investing in more real estate or the stock market. Most people thought that they were gonna make money. Even the people who remodeled thought they were doing the right thing. But many people I know took the opportunity to go on dream vacations, buy vacation homes or cabins, throw a fancy-assed wedding like those on teevee...

thomas.wong87
"Fact is in the 70s, home prices on the East Coast were much higher than SF Bay Area, which was primarily farm lands. "

Bzzzzz. Wrong Again. Thanks for playing. Your consolation prizes are down the hall by the ladies room on the way to the parking lot.

-Primarily farm lands? Just plain wrong, Wong. Oh yes, Manhattan was more valuable than Alviso or Sunnyvale.

"We still had fruit canneries working 24/7 in Sunnyvale as late as ‘79."

24/7 huh. Showing overwhelming ignorance with this last blanket statement.

Wong, Your posts are FUN to read and provide a source of pure comedy gold. Keep up the Great work!

javco says

Bzzzzz. Wrong Again. Thanks for playing. Your consolation prizes are down the hall by the ladies room on the way to the parking lot.

Loved the humor! Thanks. :)

I miss the emoticons...

my previous landlord is a RE broker. she called me many times during the boom saying "come to AZ, you can buy a new house here without spending 1 penny of your own money".

at that time, the house prices were still climbing.

i didnt buy because i do not have the money for a 300K house. even the bank would lend me money.

some people just think the money they get from a loan is their own money. no it is not yours, you borrowed from the bank.

i used my saving to buy a new BMW M3. now i share the rent with my gf. she pays 40%, i pay 60% which is about 20% of my after tax income.

i WILL buy a house after we get married. but it will be a decision all about numbers.

Well Javco, Did you live in Sunnyvale-Mt View back in the 70s.

Do you recall the Del Monte canning facilities off the Railroads, near Evelyn and FairOaks in Sunnyvale?
Do you recall the Mariani facilities off De Anza, off 280 in Cupertino?

"-Primarily farm lands? Just plain wrong, Wong. Oh yes, Manhattan was more valuable than Alviso or Sunnyvale."

Did you compare metros in Connecticut, New jersey, Pennsylvania, and even Delaware.

309 N Sunnyvale Ave Sunnyvale Ca 94085
3 beds, 1.0 baths, 1,484 sq ft

Sale History 09/04/1973: $29,950

340 N Sunnyvale Ave Sunnyvale Ca 94085
3 beds, 2.0 baths, 1,583 sq ft

Sale History 04/04/1973: $25,500

If the public doesn't understand financial concepts, and Congress certainly doesn't understand it too well either,
would you allow Congress to regulate institutions they have no idea about. They were certainly all too willing
to influence/threaten banks to make loans to people ill prepared to pay them back for political gains regardless
of the outcome. Not to mention they were willing to overlook all the GSE Accounting shenanigans, out right Fraud, and fat
bonus payouts to hit the numbers, because the GSEs were an implied extension of the US government and well connected
with their their friend on Capitol Hill.
I guess for politicians its standard operating procedures, when they are being put to the 'stress test'.

4X says

@Iggy
I am curious as to whether you are you going to blame Obama’s $8,000 tax incentive when all these new homeowners lose their equity?..you realize these folks will have to sit on these homes for 10-15 years before their homes return to todays prices right?

I do think the tax incentive - or any other measure aimed at propping up values artificially - is a bad idea. Ten or 15 years might not be enough time to get back to current prices in some areas.

4X says

This statement would lead me to believe that if someone died today from lung cancer after smoking cigarettes for 40 years that you would also want to hold the cigarette company responsible for their death. I would also be led to believe that if a mother of 6 raised 4 engineers and 2 gangbangers that we should blame the mother and not the 2 gangbangers who made the choice to go down the wrong path.
Here is my point: People have a choice in their lives, it is not our fault these people did not make a responsible, informed decision before they bought their home.

I agree that people that people have choice in their lives. My point is that focusing on the irresponsibility of the choices that some individuals made distracts us from focusing on the real culprits in all of this: unbelievably irresponsible lending practices, bad policy, and poor to non-existent regulation.

are you suggesting that the CRA played a part is this issue, iggy?

Bap33 says

are you suggesting that the CRA played a part is this issue, iggy?

Possibly, but I don't know enough about it to to have a worthwhile opinion. To the degree that changes in policy encouraged silly underwriting guidelines at FANNIE & FREDDIE etc. (like allowing up to 65% debt ratios), I can say that policy was bad, or at least poorly enacted.

There is no reason why the FHA guidelines that allow home ownership for every one in America that can show a credit standing and have a job can have a resource to borrow from. Other than banks that would want a greater chunk down and a charge a higher interest rate. Which would only serve to creating further hardship, to pay back the loan.

what was fundamentally missing, was guidelines of the Valuation of properties. I think that if a large percentage of properties being bought in a neighborhood is funded by FHA loans. Then the value of those homes can't exceed the current exposure percentage wise. Because most likely the money paying those loans off and creating the new loans will be the same money.

These indicators would keep inflation and bubbles in check.
Conventional loan neighborhoods, could have the same model but possibly a larger exposure curve.

I used to think your way, but not anymore. Why? It isn't a level playing field. If the government did not bail out the banks, I would agree. But once others get bailouts, then all bets and all morality goes out the door. I am not upside down, but if I was, I would walk away in a heart beat and feel NO GUILT at all. And yet I would never consider stealing from anyone ever. But the new morality is we get ours. As long as the corporations can declare bankruptcy and walk away- so can we. That's called fairness, justice, and the American way. Thanks superman

The fact remains that a very few people are smart, most are average, and a few are just dumb.

Duncical equilibrium.

Tenouncetrout says

what was fundamentally missing, was guidelines of the Valuation of properties. I think that if a large percentage of properties being bought in a neighborhood is funded by FHA loans. Then the value of those homes can’t exceed the current exposure percentage wise. Because most likely the money paying those loans off and creating the new loans will be the same money.

These indicators would keep inflation and bubbles in check.
Conventional loan neighborhoods, could have the same model but possibly a larger exposure curve.

Is this similar to what you are talking about?

You have some guy at the bank that gets paid for each mortgage deal. How is it his fault for pushing deals? Isn't that like his job?

@iggyman

I agree that people that people have choice in their lives. My point is that focusing on the irresponsibility of the choices that some individuals made distracts us from focusing on the real culprits in all of this: unbelievably irresponsible lending practices, bad policy, and poor to non-existent regulation.

Ok, now I understand better and can agree with your statement that the root cause is more important than blaming the players. Oddly enough, after reading all of the threads and researching the issues I am starting to believe that since 29 FHA has accomplished its #1 purpose. That purpose being, provide confidence to the banks so that they will lend money in uncertain times. I am starting to understand both the politics and the economic aspects of our current situation. If we forego FHA, then the banks stop lending. But, if we forego regulation then the banks go wild.

wish i was lucky says

There were many people who bought between 2000 and maybe the early part of 2005 before the home prices actually tripled - who did put 20% down

I humbly disagree 100% with this post if you are talking about the central valley of California. Since RE is local, I submit that in the future such statements have an area specific to the statement so valid numbers can be found. Here in the central valley of mexifornia you will not find a 20% DP loan on ANY new house, investment house, or whatever house since 1999 .... many of the central valley hispanic homebuyers where cultivated by greedy REwhores and LiarLenders, creating a whole bunch of buyers that would never qualify for a loan (of any type) without some illegal Lender activity ..... The rest were just greedy sheeple that make for stupid buyers, and the last stupid buyer has yet to buy, do not forget that ... the last stupid buyer is getting ready to fall for the gov supplied bait.

Is it not funny when you see a home you were watching sell for about 25% more than you offered ... only to end up in forclosure again?? I find that quite amusing. And the market is so full of houses now, I don't really plan to bid on the POS when it hits the market. I say POS because it is now another victim of what I call the "Tiajuana Remodel" syndrom. And the fridge and oven and washer and dryer have been removed. And the driveway has a big oil stain. You have to love how these fine early-jumpers react to their own greed.

StillLooking says

You have some guy at the bank that gets paid for each mortgage deal. How is it his fault for pushing deals? Isn’t that like his job?

It's not the local loan officers,bank managers etc. in question. You are right, for the most part those guys were just doing their thing without necessarily understanding what they were selling. It's the institutions themselves and the people at the top who did understand all of the issues, and were responsible for setting the guidelines and designing the loan products in the first place.

How many times can all of us go over the same old sh*t over and over again? I’m roughly 6 months into my involvement on Patrick.net and picked up loads of great information on here, but posts like this show up every week and the same things are repeated over and over and over and over again.

@Bap33, you speak of your beloved Central Valley so affectionately - who do you stay there? I’m sure the reasons are many and possibly complex, but why don’t you cut your losses and move to an area of California or even to a different state that makes more sense for you? When I first moved to California in 1999, I lived down in Bakersfield – a town very analogous to Merced. I had a great paying job and bought a brand new house in the year 2000 for $75 sq/ ft. After living a very comfortable life there for 7 years, the mrs and I decided to have kids. One day while she was still pregnant, I woke up and looked around and said out loud, “F*uck this – this isn’t living.” I was honest with myself for once and realized what was around me. I decided on that day that I would not raise my kids in a county where the teen pregnancy rate was at or near the highest in the state, nor would I settle for having my kids go to schools where the English-speaking households were the minority. I found a new job in a significantly “whiter” area and moved. I took it in the shorts financially for a while, but now after 5 years I can honestly say it was the best decision I ever made. My happiness parlayed itself into career/finanical success. I’m happy when I drive around the area I live in – I rarely see suspected illegal immigrants and very rarely hear Spanish spoken freely and loudly in public. The neighborhoods you describe do exist, albeit far away in pockets and not in every square mile. The schools are some of the best in the state.

The point I’m trying to make here is that much like all of us resetting the same housing crash crap over and over again in a forum rarely paid attention to by outsiders, let’s look around and be honest with ourselves and make actual changes in our lives when we discern that things are beyond our control. I’m not saying lay down or anything, but housing will be led by government policy or lack thereof and Merced, California will never get out of its own way.

Ellie Mae why do you resent these people? They gambled and lost. People throw away money on stupid decisions all the time. People go broke gambling in Vegas or chasing a hot stock tip every day. Do you resent them because they took a stupid bet and lost. Why isn't the anger directed at the people that took stupid bets and won, like the executives at AIG that left with millions in 2006.

Would not most Americans be better off if real estate prices never returned to the bubble prices?

I'm not relying on any statistics or economics education - just intuition. I recall my parents selling a house in the 1960s and being grateful that they didn't lose too much compared to their purchase price - kind of like when one sells their car. That always seemed to me to be better for people. A new house would cost more than a resale. A resale house might sell for more if it had been improved in some way. Most houses would depreciate to some extent. That seems like that would keep housing affordable and stop the unrealistic notion that one's shelter is also one's retirement plan.

For your house to also be a good investment, you have to either sell it and move to something less expensive to get the money, or take out a loan for some of the equity and pay interest on that loan. I don't know why anyone thinks that's good for most Americans.

Because people do believe that, a lot of people have become dependent on real estate as an industry. Of course, it is painful for them now with prices and employment related to real estate down, but wouldn't we all better off if it stayed that way? Don't all of these artificial attempts to reinvigorate that part of the economy just invite more of the same bad results? Let's go back to manufacturing things we can export.

@FredMG

Ellie Mae why do you resent these people? They gambled and lost. People throw away money on stupid decisions all the time. People go broke gambling in Vegas or chasing a hot stock tip every day. Do you resent them because they took a stupid bet and lost. Why isn’t the anger directed at the people that took stupid bets and won, like the executives at AIG that left with millions in 2006.

Dont be silly, it is the buyers fault and governments job to regulate the madness of the banking industry. The Banks only did what they were legally permitted, as well did the buyers. If the business deal failed then whose fault is it?...and why not resent the fact that some idiot bought at too high a price driving up the markets we seek to buy in. With statements like this, I am sure you are looking very diligently at using the 8,000 tax credit right now.

Good luck spending that 8K when you lose 100K in equity, your missing the point of the site so I highly reccomend you go back and read each and every point clearly.

@Tenouncetrout

There is no reason why the FHA guidelines that allow home ownership for every one in America that can show a credit standing and have a job can have a resource to borrow from. Other than banks that would want a greater chunk down and a charge a higher interest rate. Which would only serve to creating further hardship, to pay back the loan.

Ok, say that again but this time do it in English...it sounded like you were on to a very good point but then your ramblings lost me again?

@BAP

I humbly disagree 100% with this post if you are talking about the central valley of California. Since RE is local, I submit that in the future such statements have an area specific to the statement so valid numbers can be found. Here in the central valley of mexifornia you will not find a 20% DP loan on ANY new house, investment house, or whatever house since 1999 …. many of the central valley hispanic homebuyers where cultivated by greedy REwhores and LiarLenders, creating a whole bunch of buyers that would never qualify for a loan (of any type) without some illegal Lender activity ….. The rest were just greedy sheeple that make for stupid buyers, and the last stupid buyer has yet to buy, do not forget that … the last stupid buyer is getting ready to fall for the gov supplied bait.

LOL.....I will trade you 8K for 100K in equity?

@cashmonger

How many times can all of us go over the same old sh*t over and over again? I’m roughly 6 months into my involvement on Patrick.net and picked up loads of great information on here, but posts like this show up every week and the same things are repeated over and over and over and over again.

Well, most of us actually come to this forum to discuss housing. We could try talking about golfing but I dont think most are interested in that, my suggestion is that if you see a post you dont like...move on and find one you do like.

@Bap33, you speak of your beloved Central Valley so affectionately - who do you stay there? I’m sure the reasons are many and possibly complex, but why don’t you cut your losses and move to an area of California or even to a different state that makes more sense for you? When I first moved to California in 1999, I lived down in Bakersfield – a town very analogous to Merced. I had a great paying job and bought a brand new house in the year 2000 for $75 sq/ ft. After living a very comfortable life there for 7 years, the mrs and I decided to have kids. One day while she was still pregnant, I woke up and looked around and said out loud, “F*uck this – this isn’t living.” I was honest with myself for once and realized what was around me. I decided on that day that I would not raise my kids in a county where the teen pregnancy rate was at or near the highest in the state, nor would I settle for having my kids go to schools where the English-speaking households were the minority. I found a new job in a significantly “whiter” area and moved. I took it in the shorts financially for a while, but now after 5 years I can honestly say it was the best decision I ever made. My happiness parlayed itself into career/finanical success. I’m happy when I drive around the area I live in – I rarely see suspected illegal immigrants and very rarely hear Spanish spoken freely and loudly in public. The neighborhoods you describe do exist, albeit far away in pockets and not in every square mile. The schools are some of the best in the state.

I love the "whiter" statement, it shows that you possess a limited vocabulary and most likely a limited education. The color of a person's skin does not dictate the housing market nor their pride in ownership. Pride in ownership is directly related to their education level and the economic ability of the buyer to maintain the property and uphold decency standards. I can take you to some trailer parks in the south that are much worse than the central CA area you are referring to. Next time try using words like "higher socio-economic status" and move away from simple words like "whiter"....it shows more class. But then again, I am also a supporter of tougher immigration laws:

1. If you migrate to this county, you must speak the native language
2. You have to be a professional or an investor. No unskilled workers
allowed.
3. There will be no special bilingual programs in the schools, no
special ballots for elections, all government business will be
conducted
in our language.
4. Foreigners will NOT have the right to vote no matter how long they
are here.
5 Foreigners will NEVER be able to hold political office.
6. Foreigners will not be a burden to the taxpayers. No welfare, no
food
stamps, no health care, or other government assistance programs.
7. Foreigners can invest in this country, but it must be an amount
equal to 40,000 times the daily minimum wage.
8. If foreigners do come and want to buy land that will be okay, BUT
options will be restricted. You are not allowed waterfront property.
That is reserved for citizens naturally born into this country.
9. Foreigners may not protest; no demonstrations, no waving a foreign
flag, no political organizing, no badmouthing our president or his
policies, if you do you will be sent home.
10. If you do come to this country illegally, you will be hunted down
and sent straight to jail.
Harsh, you say? The above laws belong to the immigration laws of
MEXICO!

@cashmonger

I’m happy when I drive around the area I live in – I rarely see suspected illegal immigrants and very rarely hear Spanish spoken freely and loudly in public.

I think we agree on the same points, I just want to make the point that we cannot focus on specific groups of people as this is a socio-economic issue.

Your issue seems to be rooted in the fact that these people EITHER have 1) a different skin color 2)chose to NOT assimilate into American society and 3) have forced their language and culture upon us. I can agree that it does not sit well with me that English is becoming secondary language of choice for jerks that come to our country, however, the same things were not said of the Irish, Italian, Jewish peoples that came here in the early 1900's. Actually, the early settlers of Irish, Jewish and Italian peoples displaced former African slaves from working industrial jobs during that era. Africans had been here 400 years yet jobs were given to the new settlers of Irish, Jewish and Italian descent. I doubt that anyone would make the same statement if the neighborhoods were dominated by a group of Irish, Italian immigrants speaking their native tongues. Take note, that as these generations pass so too did their Italian, Irish cultures and language. The same is happening with Mexican immigrants as well, if you dont believe me just walk up to one and start speaking Spanish...I guarantee they will respond in English.

In 'State of Emergency' Pat Buchanan stated:

“ America did not listen [to Booker T. Washington’s concerns]. Millions of jobs in burgeoning industries went to immigrants who poured into the United States between 1890 and 1920. These men and women enriched our country. But they also moved ahead of and shouldered aside black men and women whose families had been here for generations and even centuries. Not until immigration had been dramatically cut in the Coolidge era, and World War II created an all-consuming demand for industrial workers, were black Americans brought by the hundreds of thousands north to the manufacturing cities of America. And when they were, a Black middle class was created upon which the civil rights movement was built. When immigration stopped, Black America advanced, as Frederick Douglass, Booker T. Washington, and A. Philip Randolph said it would “

I put quotes around it Forex in order for me to be able to say that I didn't really mean it and/or claim sarcasm (more sarcasm here). I grew up in the south and am very familiar with the folks you described. You are right - it is more a socio-economic desire than it is anything color related. I think we all know that. Consider the post I was responding to though...

Housing is good thing to talk about in a housing forum, but we keep resetting the same stuff over and over again.

elliemae says

Yea - but Techie, you might not have been able to get THAT house if you’d waited. I think I recall how much you and the wife loved it. I sincerely hope that you are enjoying the place.

Funny thing is there even nicer houses going for less money in my area now. I really wanted to wait longer, but the house had everything we wanted and you should have seen some of the crap we seen people wanted 350k for. I'll admit it was a mistake to buy so early in the housing collapse, I'm lucky if I have any equity in the house right now, but I'll live with the mistake and not blame the bank or the realtor. The wife isn't happy with the bills or the fact we don't the the cash to make improvements she wants but she's accepts the reality we have now.

A professional should have more experience, he is being paid for his expertise and training. Those include banks, lenders, realtors, government agencies, the federal reserve, congress, etc. Everyone played a part in the housing boom and bust. Every person had some responsibility in it. There are several people who stood up and said there was a problem, but many didn't. The problems compounded and created the situation we're in today.

That being said, the guy in the story might have used several factors in making his buying decision.
1) The market had moved away from what he could afford, so he bought what he could afford. That being in a neighborhood that wasn't quite as desirable as he had thought. I'm sure he expected "issues" but not multiple break ins. I'm sure there are other issues with that neighborhood that he didn't have experience with and didn't realize would be an issue for him. I think it would be fairly reasonable to assume that a neighborhood going up in value at the pace it was back then, would likely push trouble out as well. If he could afford the place, then how could someone less economically fortunate afford that those places? As they sold, they would be pushed out. That is fairly reasonable to assume.

2) Property has been a very stable investment and almost always helped people with retirement. Someone mentioned "how does it help? an atm machine?" I say: If your retirement savings aren't sufficient and/or rents increase faster than you can afford you will be pushed from your rental property to who knows where. If the retiree had owned he would not have experienced this. He might not have some big wad of cash to pull from, but then again he doesn't have rent to pay. If they had a huge wad of cash and just before retiring it was all "lost", they would still have to cover rent. If their housing value crashed then they would still be left with nothing, but rent would be covered.

3) He was in a non-recourse loan (hopefully??). If everything failed him, he had one option he could employee himself to stop his losses and get out. If the banks and others involved failed to foresee a time when this option could be employed, that is their fault. They took a gamble, and like him are starting to lose out.

Now he is looking at pulling that trigger and before he does, he is saying "What other options do I have, what can I do?" For him, it's probably the right decision to make. It is his right, and part of the process that was used to get him into the house. No one probably expected him to use it, but it was there for him.

That being said, it could be said he is doing a socially responsible thing in some views. He is asking how he could avoid pushing the dooms day button, which will doom the bank to a massive loss, will push him into moving, but will also hurt others who are going to be effected by more inventory on the market, potentially higher rates for them to cover those losses, and the neighborhood potentially loses a "good" resident of that neighborhood.

And to finish up, I saw a great comedian the other week. "Immigrants are coming here, not knowing our language, they can't write, they can't read, they have little education, and few skills if any. If they're stealing your job, you're a retard."

I think we're all reading a bit more into it than exists. It looks like poor choices on their part and they want to bail. If their home had appreciated, they wouldn't want to share the profits with the bank...

In the bubble, the only people doing the correct thing was sellers. They kept pushing for more and more in their asking prices. Sellers could get away with pushing prices up and up and up only because there were lenders willing to finance those higher prices. Buyers are left with two options: 1) reject financing, stay out of the market, and more than likely rent or 2) compete against buyers who are being financed with huge sums of bank money by financing with huge sums of bank money.

Should buyers have taken out Sub-prime, Option ARMS, Alt-A loans with housing to income ratios of 10:1? No.

Should banks be expecting the money they loan out back with interest over the course of the Sub-prime, Option ARMS, Alt-A loans and with housing to income ratios of 10:1? No.

Who's primarily at fault? Well, last time I checked people who worked for banks are supposed to know what the heck they are doing. If somebody has seen a bank commercial saying, "Come borrow money from us, we are a bunch of idiots who don't know a dollar bill from a hole in the ground," please someone point it out on You Tube. I'd like to see it. Even worse, by pushing up housing prices through short sighted financing, the banks endangered their prime borrowers by forcing them to compete with sub-prime borrowers.

Sure the borrowers should not have borrowed the money. But, if you are a tow truck driver, your job, 40+ hours a week is to tow. If you are Wal-mart stocker, your job 40+ hours a week is to stock. If you are a banker, guess what...your job is to manage money.