patrick.net

I don't know if hose people are "rich". Many middle class people bought homes that were a million with neg am loans and predatory lending. You can't blame the people as much as you should blame the government for letting all regulation go on lending practices. Many people didn' t even understand the loans they got into.

Bullcrap!

People (EVERYONE that bought at insane prices) wanted a house, they would have signed a firstborn clause, to get the loan.

So I read the title before I read the article :). After reading it I still agree with my original post, however many "rich" or "upper middle class" are walking away just becuase they have a "bad investment" on their hands that is a fact! However, the public shouldn't make blanket statements that everyone is just walking away because of a bad investment. We don't know everyones situation, maybe they lost their jobs, in this economy many of the "rich" lost their jobs. I also think many people even those in the upper middle class are posers and still bought more than they could afford. I think many people did regardless of econimic class.

Condohelp says

We don’t know everyones situation, maybe they lost their jobs, in this economy many of the “rich” lost their jobs. I also think many people even those in the upper middle class are posers and still bought more than they could afford. I think many people did regardless of econimic class.

True dat.

However, many people with higher incomes from the professions due to the bubble - loan officers, realwhores, investors, etc - didn't plan for a rainy day. They were raking in the bucks. That goes for construction workers too... I know many who bought every toy known to man and spent $20,000 (not a typo) on horses for their little kids to use for 4-H... and have lost it all. If only they had saved a bit and bought something they could afford - they could have paid it off and had sufficient funds left over.

I'd like to see one single person that bought in 05-07 that didn't buy with the intention of flipping the house with in 3 to 5 years, and had no intention of entertaining the worse case scenario where they actually were forced into taking those loans to term.

It has been for me distinguish who was using who, and frankly have been both appalled and disappointed that the banks were the villain in this by the "Predatory Loan" perspective.
That really helps them dodge a big bullet, from a fraud wrap to letting them off with a slap on the wrist trumped up unfair business practice accusation. "Oh they were stupid and you took advantage of them."

When the real crime was the money trail that lead to the County Appraisers door.
These appraisers and inspectors are Contractors, and have a better grasp on Real Estate value than speculation and say so. These guys were enticed to make those numbers higher, by someone, they weren't intrinsic nice guys here. They are City and County workers.

The banks should have never loaned 300K-400k on 99k-120k ranch shacks in historically ran down RE distressed communities. Houses that were bought for 90K then flipped two times in a year to end up at 225K with in 3 years. It all ballooned and scaled up from there.

Now forget that Horhey and Luicia Menedez only makes 29K between them and got loans for that amount. That's wrong too, but the bank should have never loaned that kind of money on every shack standing. They should cap out at country records and if speculators want to run the market up from there. The bank loans based on fair tax value, and if want to pay more, it comes out of the buyers pocket.

Where was the guys at Washington in charge of the Real Estate division of Homeland Security?

OH? It's not that kind of "HOME" land.

Tenouncetrout says

I’d like to see one single person that bought in 05-07 that didn’t buy with the intention of flipping the house with in 3 to 5 years, and had no intention of entertaining the worse case scenario where they actually were forced into taking those loans to term.

I know many who bought and actually believed they'd be able to afford long term. Not everyone was a flipper. They were naive, stupd, and otherwise lacked pragmatism...

Tenouncetrout says

Where was the guys at Washington in charge of the Real Estate division of Homeland Security

Some people, including my husband bought with the intention of this is the way it is. You have to buy a small house first, make a little bit of money off of it to buy a big house. We have other friends who saved for years put over $200k of savings down just to buy a 2,000 sq ft home in the middle of the ghetto, all so they could have a nice house.

I'm sorry that we bought a place. We did not expect to make millions, but we did expect to make $15k to help with more of a downpayment. But most people in this country have the notion that part of the American dream is to own your own home. After reading Patrick's blog, I don't think it should be part of the American dream until home prices deflate.

I think that everyone played their role in this mess, but unfortunately it is the middle class that will have to make up for it. The big guys on wall street are still living it up, and so is the x ceo of countrywide.

Condohelp says

ncluding my husband bought with the intention of this is the way it is

I was VERY well-read about the situation 2005-2006 and I did not expect $300,000 condos to decline to $200,000.

I thought prices had peaked and there would be a $30,000 or so drift down as incomes inflated and buying power returned.

It wasn't until the Casey Serin story broke in late 2006 that I realized that prices (and loans!) were totally divorced from buyer ability to pay, and that the low-end was heading DOWN in a big way once the fraud element was exposed.

Brown, white, yellow, black, purble and the rest who werewearing that Realtor Gold Jacket were the ones getting rich hustling homes. Wall Street/Banks made penny while REA were carving up 6% off the top. Have their power and influence stopped ? Nope! They are still partying it up...

Loans go bad, they get hit against earnings and so goes the loses back to the bank. I havent seen anyone "clawback" Realtor commission on the busted sales, have you?

Troy says

I was VERY well-read about the situation 2005-2006 and I did not expect $300,000 condos to decline to $200,000.

How did you feel when that same $100K condo went to $200K in the first place from 1998 to 2000? Writing on the wall was much earlier than 2005. Even the Wall Street Journal started to ask if there was a housing bubble back in 2002.