No big surprise.  It all harkens back to the Reagan administration when usery laws (remember those?) were scrapped and the banking industry deregulated.  That may have made Reagan and Milton Freidman popular in the financial circles, but, it is sure coming home to roost now!...Like FDR said, "government's responsibiliy is to save Capitalism from itself".... I wish Ronnie would have listened.

Seven years ago, when we were outbid for every single offer we put in to buy an average house, we felt something was wrong.  When we saw relatives working as janitors buying $500,000 houses, we felt something was really wrong.  When we saw friends living in a homes hundreds of square foot bigger than our apartment, but still complained of "bursting at the seam" and had to stretch to buy much larger, more expensive homes, we felt they had more than a few loose nuts in their heads.  Nevertheless, nothing can be compared to seeing the highly revered Chairman of the Fed Alan Greeenspan trying to encourage people to spend and spend on borrowed money; diagnosing the economy as healthy and nothing to worry about; predicting at worst the housing market will just undergo a soft-landing; and now lamenting he didn't see any troubled sign ahead. Our family of four have been happily renting a two-bedroom apt. for the last eight years, and are very happy thinking of the things we don't have.

The article states that "This is a good thing." But for people like me - who make a living working in the housing market (i.e. Building doors for newly built homes), is this really a good thing? I'm not so sure. Production where I work has gone to it's lowest since I've been here, starting in Christmas when we had 3 weeks off. Not so sure about anyone else in the market - But I don't feel like losing my job.

Silver Lining?? If this is a good thing for Americans, I would hate to see the bad things that are still to come in '08. This market will effect everyone, just read the Fed's forecast!  What's so bad about this is that it is effecting our entire economy and the U.S. looks bad worldwide because we keep borrowing billions of dollars. Please give me more than one page worth of words to explain this Silver lining, this article gets a rating of ZERO!

You are all way off.It was not greed by lenders and brokers , it was greed from the buyers.No one makes you buy a house.All payments are disclosed way before closing so that buyer knew what the paymnet was before moving forward.Not to mention all buyers have to get pre-approved either before or after an offer has been submitted .So again who was greedy..........hmmmmmm maybr as Americans we need to start taking responcability for our own actions and stop blaming the industry.I'll bet the housing mess would correct itself very soon if the media would just either shut up or learn how to report and what it means.They are clueless but yet over half Americans listen to them and feel they have knowledge.Let's all start trying to educate ourselves and quit blaming other people.

The individual who once said "those who don't understand history are doomed to repeat it" are at it  again.  Let's see, Wall Street Types and dishonest Brokers make off with mountains of cash, leaving the outmanned Feds and befuddled homeowners to wonder what just happened!  Sounds like the S&L Crisis all over again to me!  Hang on for the next "game"!!

There are two sides to every story.  While housing was going up and up, only good news was reported.  Folks that didn't want to get into debt up to their eyeballs and risk adjustable loans (i.e., Financially responsible people) were not able to afford to buy a home and had to rent.  Now prices are coming down to realistic levels and these same people (Financially responsible) can finally afford a home.  The run-up in housing values was a benefit only to the financially irresponsible.  And only the financially irresponsible are currently paying the price.

People dont seem to understand that When the Feds "cut the rate", it does not mean they cut mortgage rates. Rates Are on the rise. 5 weeks ago  a 30 yr fixed was at 6.125% it went down to 5.25% and is now currently at 6.625% that is an  insane amount of market volatility for a 5 week span. If you have the oppurtunity to lock in next time rates dip into the 5's, stop being greedy and take it. I am a Sr loan officer at a very large lending institution in New England. (1-800-East West extension 8809 if your interested). I had people 4 weeks ago tell me they wanted to wait and see if the rates went any lower, right after i quoted them 5.25% on a 30 year fixed with 0 points. Stop being greedy America!  Reminds me of the contestants on that show 'Deal or no deal'. Being offered hundreds of thousands of dollars and they want to open "1 more case". Be smart, be conservative, and stop gambling people. Times are tough and are going to get tougher. Take advantage while you can-Mike  from Massachusetts

Clyde,

Depending on how much they owe on the house, they may not be able to accept it without 'short sale' lender approval.  

I would go ahead and make your offer.  The worst that can happen is they say 'no', and you keep looking.

We are a country of indulgence.  We are no longer a country of savers but spenders.  Interest only loans and arms should never have been allowed in my opinion.  It's not the responsibility of our government to bail out banks that had shady lending practices to begin with and lent money to people who clearly could not afford to pay it back.  And the government has no business bailing out borrowers who clearly borrowed more than they could afford.  This is a very painful lesson but I think it's one we as a country need.  Government should stay out of this mess and with time and much pain the economy will correct itself.  It always does.