subprime-mortgage meltdown; Is the default due to morgage companies or the borrower?

[Delock]

Ultimately the responsibility is on the consumers. Too many people out there have their priorities out of whack. I blame this primarily on the entitlement society our government has created, but personal responsibility or lack of is to blame.

There are too many people out there living living in government housing but have big screen TV's and XBox's and driving a Lexus.
There are too many people out there spending $200 to $300 monthly on cable, Internet and cell phones but are not willing to purchase insurance for themselves.
There are too many people out there buying "Bling" expensive purses, luxury (non necessity) items but not taking care of their responsibilities.
And there are too many people who purchased homes, NO financed homes they could not afford.

It's the ridiculous sense of entitlement that has run rampant.

Other than a home and a car (which is debatable), If you can't pay cash for something without being strapped until pay day... YOU DON"T NEED IT and shouldn't be buying it.

Dave Ramsey's "Financial Peace University" should be required before ANYONE can open a line of credit.

I would not say "government housing" but let say stay in apartments with the same items. Because most government housing I visit it's rare to see an high end car parked there.

Now I will say this! Society is to blame for this. Everyone wants to be like the man on top. We desire the material stuff that would make us seem important. We is being us in a general way! And this does not effect anyone based on race, creed or sex. It affect everyone! Next time you go to car dealership ask about the "special program for bad credit) rates start at 17.5% and up. Yet, people will still run in and buy a $30,000 car with 86 months term!

[Kiovo]

100% consumer's fault. They not only got themselves in this mess but they brought the whole country if not the world down with them. Yes the banks and mortgage companies gave them the ARMs, but they signed on the dotted line. Without their signature there would be no loan. The people who got themselves in this mess and are blaming their mortgage brokers, banks, real estate agents etc. are pretty much saying, I am so dumb I can't do simple elementary math. I know there are people who lost their jobs and therefore their homes and that's understandable. But when it comes down to it, too many people took out loans they knew they couldn't afford. Same goes for all the credit card usage.

[Darbex]

Believe me when I say I think most Americans are ignorant most by choice they dont want to know. But the mortgage crisis was not just the fault of the consumers as I stated earlier the government and banks are just as liable for this mess. Actually I blame the government the most for this.

[Delock]

Believe me when I say I think most Americans are ignorant most by choice they dont want to know. But the mortgage crisis was not just the fault of the consumers as I stated earlier the government and banks are just as liable for this mess. Actually I blame the government the most for this.

I fault the banks!

[Darbex]

The banks operated in a define space that was allowed by the government. The government allowed them to take these risks and told them if the people default we will pick up the mortgage. So why wouldnt they do what they did the government gave them the pass. Now if the government said you can take the risk but we arent going to support you then I promise you the banks wouldnt have done it to the magnitude that they did. JPM and all the major banks wouldnt have put their money on the line for these fringe consumers that couldnt afford it.

[Kiovo]

The government might of started the snowball but ultimately the borrowers' are the ones that took out the loans - the banks cashed in, I don't fault them for that.

[Darbex]

Its all there fault. The banks got to greedy because they knew the government was going to support the bad debts. The government had every chance to stop it and actually Bush in his second term tried to stop it but was stopped by congress. Many consumers were just flat lied to about the significance of ARMs. And I am a finance and accounting guy but I promise you I did not read the entire mortgage contract threw and threw its just to much information even for me to take in let alone an individual that knows nothing about mortgage contracts or where to find in the contract the key points they should be looking out for. The government should have acted like the adult in the room like its supposed to and stopped this from snowballing but it helped politicians get elected.

[Darbex]

I list it as follows:

1. The government - The government is charged with protecting Americans and helping promote our society and they failed.
2. Banks - The banks got to greedy although I think it was created by the government but their greed was still too much even for a staunch capitalist like me.
3. Consumers - The American people should have paid more attention but as I stated many were lied to by the banks and government

[Kiovo]

I see your point Darbex, but to me, it comes down to personal responsiblity. We bought our house about 5 years ago during this whole mess, and we sat down and figured out how much we could comfortable afford. We didn't let the bank or mortgage broker tell us. Just because sub-prime loans were available doesn't mean it had to be used.

[jeebus]

I see your point Darbex, but to me, it comes down to personal responsiblity. We bought our house about 5 years ago during this whole mess, and we sat down and figured out how much we could comfortable afford. We didn't let the bank or mortgage broker tell us. Just because sub-prime loans were available doesn't mean it had to be used.

Yup. We chose an older neighborhood that was more established, with most homeowners living there from the late 90's. Because of this, when the ARM bubble burst, there were few foreclosures in our neighborhood - mostly just those who tried to jump from an apartment to a house with no real financial backing, all propped up on an ARM.

Now, the new cookie-cutter neighborhoods next to us took a HARD hit because they were developer financed and mostly ARM's on the same type of first-time home owners. Now there are literally hundreds of foreclosed, abandoned, and unsold homes in the adjacent neighborhoods as all those people move back to where they were living just five years ago.

[myjohnson]

Google "predatory lending practices".

Banks and lenders are not as innocent as you think.

[Darbex]

+1

[jeebus]

Google "predatory lending practices".

Banks and lenders are not as innocent as you think.

That's still a weak excuse as to why someone would take a loan that they can only temporarily pay the interest on.

Are we really going to defend the: "Woe is me. The bank tricked me into this loan I can't afford because I just wanted to live how the pop-stars on MTV cribs live, but I didn't want to actually earn it.." mentality? Give me a break.

There is no American ethos of "hard work equals eventual success" left in this society.

[Darbex]

Wow I am one of the biggest proponents of the fact that vast majority of Americans are ignorant and lazy but predatory lending is real and is a big factor in the issues we face. Banks are one of the most corrupt industries in the US economy. A lot of people werent buying million dollar homes they were buying middle of the road middle class homes. And you are lucky you live in a state that real estate is cheap. In other states due to supply and other factors a 200K home here would get you a home in LA that is in an area like 5th ward or Acres Homes. To live in a middle class home in CA you have to spend atleast 500K and the salaries in those areas are not that much higher then they are here. I remember I was thinking about moving to Seattle to work for a company and they were offering me the same pay as I got here. Yet the cost of renting an apartment near the company which was actually outside of Seattle similar to Katy the apartment cost $2,000 a month where in Katy you could get the same apartment for $800 a month.

[sunrise]

Since the topic of taking a loan out and only temporarily able to pay the interest, what about pay day loans or the pawn shop loans? These loans are legal and have extremely high interest rates!

sunrise