Foreclosures

The news is filled with stories of the rise and fall of the "Subprime Lenders".

As I understand things - I say it this way as I did not buy a home over the last few years - loan companies came out of the woodwork to offer Interest Only Loans for new homeowners. After a specified amount of time, the payments would readjust to allow for new interest rates. These loans were even being offered to those with low or downright poor credit ratings. Now, people are having great difficulty paying the new monthly amounts. Loan companies are failing. Foreclosures are growing. Thus, I ask this question: What the heck did you expect????

The problem is that people want everything right away. They aren't willing to wait. Thus, they got loans that they couldn't afford, with the idea that interest rates would stay low or they could just flip the house and make a huge profit before the payments went up. Nice dream. The reality was that the housing market began to tank because people pushed up house prices because they got into a bidding war to see who could buy the biggest and best property with the least down. Housing prices in my area are so high that I can't even begin to think of purchasing a home.

I should feel sorry for these people, I really should. And I do feel sorry for those who were badly deceived by loan companies, some of which falsified or grossly inflated applicants' income so they would qualify for a loan. These are people that I feel sorry for because they just didn't do their homework. I also feel sorry for those who were scraping by and either lost their job or had medical bills or some other tragedy crop up. But for those who were just looking to make a quick buck, to brag about what they owned, or to just let the bank foreclose when the interest went up I say: Nyahh, nyahh, nyahh. (Okay...so that was childish.) Still, I have little sympathy for those who were greedy.

What happens now? Do housing prices come down to a more realistic level? I don't know. I'm not an economist, realtor, or other form of expert. I just hope that people will learn to live within their means and be satisfied with the basic needs of life. But in California, I doubt it.