AS A MORTGAGE SPECIALIST I SAW THIS COMING FOR SOME TIME. 3 YEARS AGO, OVER 50% OF INVESTORS (CONFORMING OR NON-CONFORMING LENDERS) WOULD ALLOW YOU TO STATE (STATED INCOME) THE INCOME OF ONE LIVING OFF OF  SOLELY FIXED INCOME SUCH AS SOCIAL SECURITY. SO IF THEY MADE 2,000 PER MONTH IT WAS OK TO STATE THE 3,500 NEEDED TO COVER THE DEBT SERVICE. THAT GOES TO SHOW HOW THE 4 IN THE MIDDLE WERE ABLE TO FIND MORE INVENTORY.

I STILL TO THIS DAY DO BELIEVE NOT ENOUGH BLAME IS BEING PUT ON THE BORROWER. THE BORROWER WAS AND IS STILL A CASH COW. ALWAYS WANTING MORE AND NOT KNOWING THEIR MEANS. ID BE DUMB FOUNDED IF ANYONE TRIED TO CONVINCE ME THAT THE MAJORITY DID NOT KNOW OF THE POTENTIAL DANGERS OF THE MORTGAGES THEY WERE SIGNING FOR.

ONE POINT THAT I DO AGREE WITH IS THAT ONE EXTREEM HAS NOW CONVERTED TO ANOTHER EXTREEM. I HAVE AT LEAST 1 POTENTIAL BORROWER PER WEEK THAT I TURN DOWN THAT SHOULD NOT BE TURNED DOWN FOR A MORTGAGE. MOSTLY THEY ARE SELF EMPLOYED OR ARE ONE WITH HARD TO PROOVE INCOME.

IN MY OPINION WHATS BEEN DONE IS ALL THAT CAN BE DONE. THE MORTGAGE INDUSTRY IS BACK IN ORDER AND RID OF ALL MORTGAGE PRODUCTS THAT HAVE CAUSED THIS MESS.  IT IS NOW TIME TO RIDE IT OUT. I FEEL CERTAIN REFINANCE OPTIONS SHOULD BE MADE AVAIALBLE TO HELP THE STRUGGLE, FOR INSTANCE, IF A HOME OWNER IS OVER EQUITY, WHY NOT JUST ALLOW A REFINANCE AT CURRENT MARKET RATES AND SPREADS WITH MORTGAGE INSURANCE INCLUDED ? HOWEVER, THEY ALSO NEED TO COMPLY WITH TODAYS INCOME VERIFICATION PRACTICES.

THIS HOUSING BUST WILL HAPPEN AGAIN. AND IT WILL HAPPEN AGAIN AFTER THAT TOO. IT HAPPENED IN THE 90'S. THE ONLY DIFFERENCE FOR THE FUTURE IS THAT IF A MESS DOES OCCUR, THE MESS NOT BE THE MORTGAGE INDUSTRYS FAULT WITH BAD LOANS. ONE THING AND ONE THING ONLY CAUSED THIS MESS. INTEREST RATES WENT UP. INTURN, THAT SLOWED THE PURCHASE MARKET WHICH THEN DECLINED VALUES OF REAL ESTATE.

ID ALSO LIKE TO POINT OUT THAT WAY TOO MUCH BLAME HAS BEEN PUT ON THE SUB-PRIME INDUSTRY. THE SUB PRIME INDUSTRY IS ESSENTIAL FOR GROWTH IN THE HOUSING INDUSTRY. IF MY MEMORY SERVES ME CORRECT PRIME / CONFORMING INVESTORS SUCH AS HSBC, FLAGSTAR, COUNTRYWIDE, WASHINGTON MUTUAL, BANK OF AMERICA, WACHOVIA WERE THE FIRST ONES TO OFFER HYBRID AND OPTION ARM'S. THAT MEANS, THERE HAS TO BE ALOT OF GOOD CREDIT RISK, AT RISK !!!!!!!!!!!!!!

I agree with Bruce Marks, that at the core of the issue are some defective mortgage products.  They made mortgage money avaialbale to people who could not afford home ownership in the first place.  But, how much of the current "crisis" is because people are simply financially irresponsible.  How much of the bankrupcy "crisis" has a greater relationship to second mortgages and credit card debt connected to cars, electronics and other life style choices?   Government  may help in the regulation of motgage products, but where is the discussion about holding consumers responsible for their decisions.   In addition the investors in these sub-prime mortgages are not financially unsophisticated.  They most certainly knew that the higher return was founded in higher risk and should be left holding the bag they invested in.  

My home was foreclosed as a 1st time home owner.  I lived and love that house for5 years.  I am a mortgage auditor for a well known financial group...I have been laid off my job for 9 months.  The people who can afford to purchase homes before for the mtg. slump still have same purchasing power now with a bigger grin.  As for me, I file my taxes this year as a capital gain for a home that I loss due to forclosure.  The working poor sill suffers.  Is change in the air for America I dont know.  My life has not changed no matter whom was is Presidental control.

Who stated the values of homes in 2005, the  appriasers. In certain areas, value fell 50M to 100M in a matter of months. It was my impression that Lenders will only loan what a property is worth. Do the appraisers not bare any responisibilty in this total real estate meltdown  ?

We took an adjustable rate with the intention of refinancing in two years, we were well able to make the higher payment as well so we did not overextend at the time. A hospital bill of 14,000. six days before the company insurance kicked in changed all our plans.  Our house value dropped from 70 to 58 because of foreclousres in our area, so we can't refinance or make any improvements.

Kd

People who have a job and have not had any problems yet are always going to say the high and mighty thing.  What about the people who HAD the job and the money to get the house, then the job market fell and they lost their job???  is it their fault still???  What and arrogant thing to say that the borrower is at fault, it's like your saying anyone who gets laid off is probably not worth hiring and not credit worthy.  It's like your saying anyone who lost their job is a peasant!

What?  You can't save enough money to cover a job loss, if we could, on your terms everyone would have to make three times the value of their home as annual income to be able to own a home.

People on the brink of the pit need to stop talking to people at the bottom of the pit and just either throw them a rope so they can get out, or shut the heck up!!

Real Estate has "melted down" at least in my area of the country due to lack of appreciation. Without appreciation these no down buyers immediately are upside down in their homes the minute they buy them.The lenders continue to offer no and low down financing to the credit worthy in a now depreciating market.This will just create more forclosures until the national and local economies accelerate again.I personally don't  see this happening for 2-3 years.

My wife and I live if Jacksonville, FL.  We went on vacation in May 2003.  When we came back home after only a week the house we had purchased in 2002 had increased in value from $169,000 to $215,000.  Heck, we sold, paid the cap gains taxed and made out great.  I tgought the person that bought it was crazy.  But they wanted it so we took their money. You had to see it coming.  There was no way the market could support the housing increases.  We are now building our second jome since we sold the one in 2003.  We have great credit and own the lot but now we are facing higher interests rates (and I always use a 30yr fix).  But the banks want their money back and they will make it off those of us that 'can' afford to pay a monthly payment.

I wanted to reply on a previous message posted.  Yes, appraisers did state the values of homes higher and higher in 2005, because they had to.  Developers did not have to appraise the values of their homes in the same way as a consumer.  They could create a new value for whatever they wanted.  Appraisers would use these home sales as "comps" to support values for other consumers looking to purchase or refinance a home.  The imaginary equity bubble that has busted was created, in my opinion, by developers and the large banks that allowed them to create a value without a professional appraisal process.

If you foreclose on a property, how hard would it be to make a big purchase such as a house or a car in the future?