Quote:
Originally Posted by powerclown
I first blame the mortgage companies for dangling the dream of home ownership based on a faulty arrangement. It was greed; the fundamental transaction was flawed. Then come the politicians for allowing (and encouraging) this lending behavior to continue. Next, the people who bought houses only to sell them for a profit. Finally we have Joe Homeowner who, while simply wanting a house to live in, made the decision to buy the Cadillac on a Toyota budget.
The Democrats supported lowering lending standards so more minorities could buy homes. Now, in 2009, which groups do you think are suffering the most from foreclosures?
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I agree there were irresponsible lenders and borrowers. When prices fall and adjustable rates increase some will be unable to refinance and there will be foreclosures and mortgage holders will take a loss. Sure it's tough to take a 20-30% loss (many of us have lost that much recently in the market) but we should be able to take our lumps and move on.
But the terrible thing that has happened here is that these mortgages were bundled and leveraged to the point that the entire world's banking systems and economies are now failing all because of a real estate price correction. A correction that most halfway intelligent people knew was way over due. The people who are responsible for these derivatives, tranches, hedge funds or whatever they are called have done far worse than irresponsible borrowers. Instead of investors just taking a loss we must now go through world wide economic collapse.
So it looks like those responsible for this mess will be bailed out and there will be Socialism at the top but most of us will have to fend for ourselves.