It is not only our Government that failed us it is our State that did too.  Here in California even the County Officials got into the money grubbing skeem!  My husband and I want to buy a bigger house because our family is increasing.  We decided not to sell our house but to rent it once we found our new home.

We are pre-approved and it is almost impossible to buy at this stage in the game.  I refuse to buy a "New Home" because not only the 1.9% property taxes but "Special Tax" they put on these new homes for what they say is new streets and schools (I thought we were already taxed on this?).  It is so rediculious to be paying almost $8,000 to $9,000 a year just in taxes then a house payment on top of that????  I refuse to be double taxed!!!!

We have three BIDS out on homes in well established areas but the bank won't answer us personaly and then by the time they look our bid there are 5 other bids out for the same home.  There is no communication, no one calling you to tell you that someone bid higher than you.  They just take the bid they want to take!!!

I am so tired of being beaten out by investors and these properties just sitting there sucking the life of whatever properties that are around them!  

I would move out of California in a heart beat but because of the Grandparents, I don't.

As many have stated the housing market needs to make an adjustment as was probably last witnessed around 1980. Part of the equation to all of this is in the early 80's interest rates were relatively high 10% to 14% compared to today which kept home prices down. Since the bottom line is the fact that the average  homeowner (most of us) buys as much house as we can afford based on our monthly payments. As interest rates dropped the monthly payment for a perspective buyer of a new house came down increasing demand and driving the housing prices up. Now couple that demand with the artifical demand of sub prime loans, allowing people to buy more home then their income warrented, and housing prices continue to go up. Next we go into the refinance craze of the late 90's because we have all this artificial equity in our homes and even lower interest rates become available. So you refinance and realize your house payment is lower, wow I can afford that so you grab some cash out and increase your mortgage amount while keeping the payments the same. 2006, 2007 Recession hits Detroit (who cares once again thats those car makers problems not ours) job losses, can't afford artificially high price house. Manufacturing jobs are now overseas and new job at Walmart doesn't support house payment, default, housing glut. Then Detorit's problem as we have witnessed through out the past 50 years becomes everyones problem. I'm now out of breath and this is becoming a boring book so I'm going to lunch...but it isn't free.

What if we folks throughout the prosperous nations wind up seeing the reoccurence of theGreat Depression.  Maybe all of these folks who are "gimme nows" will see the handwriting on the wall and realign their priorities.  The average individual can't have absolutely everything he/she wants ... yet they continue trying to.

John posed close to THE question several posts ago  when he wrote ...

"Until taxpayers funds are appropriated to absorb negative equity..."  Are you saying that my tax dollars should pay for someone over-extending their finanical ability to live in a home?  That's absurd!  What's next.....the Government appropriating funds for cars that are depreciating faster than the "Blue Book" value?  In life everyone is accountable for their actions.

Isn't THE question, "Who can or should pay  (and how/when)  to absorb the negative equity resulting from the current down cycle of housing prices collides with "too easy" credit of the recent past ?  

Why not those who profited in the up-cycle?   To the fullest extent feasible (e.g. debtors prison is probably a bad idea).  At least return their profits.  The "easy come easy go"  solution.

Easy to say, difficult to put into action though so that's probably why the calls for various versions of "let the market handle it" or  " freeze that piece of economy until the up cycle returns"  type solutions.

Being intellectually lazy myself ... I'm inclined to think the answer is in some elegant combination of the three  ..."easy come easy go", "let the market handle it" and  "freeze that piece of economy".

How about an across the board 2pt drop for anyone holding a mortgage??This would certainly help the middle class and put money back in our pocket and out of the hands of the lenders who overinflate our rates to make up for foreclosures.......  

Two things: first. since the gov. gave tax payer money to the banks, the banks should be required to deal with home owners. Period. They don't need a new loan. They need a modification to the principal balance and a rate reduction. File an amendment to the original note terms. The difference between the old note and the new note terms should be paid out of the government funds to satisify the old note terms. This is not a cure all but would likely keep many form losing their homes or just walking away do to property being over encumbered. Second and most important: The last thing this housing problem needs is more, cut throat deals on the market by new home builders who are at the root of the housing problem anyway and caused the over building.

Why don't the the mortgage companies just extend the existing mortgage. If the consumer has a (30 year) extend it to (50 years). This will lower the payment considerably and the lender will still recieve payment. It might be less but less is better than nothing

Why don't we take the $700 billion, distribute it to the taxpayers for them to paydown their mortgage, student loans and then if there is anything left, they can spend it at the retail markets.  The money used to pay the loans will hopefully help them recover from being upside down on their mortgage, the cash goes into the banks and the credit freeze will thaw.

The main reason that we are in this complete mess is that for the last 8 years we have had absolutely No vision in the White House. George Bush should have been impeached when the American People found out the Truth about weapons of mass destruction in Iraq. We have spent trillions of our American Tax dollars on a WAR that should have never happened. There has been No energy policy . The last 8 years could have been used to Retool Detriot instead, Tax credits were given to people to buy gas guzzelers that are not only not green but unaffordable because of their inherent wasteful thirstiness.  The Mortgage mess?? needs to be addressed But should have never happened. Lack of leadership on all fronts..all of it on Bush's Watch

I say what the hell did they expect?  The mass majority of people in this country do not make $ 100,000 dollars a year. How can we afford $ 1000.00 house payments a month? We have rising energy cost, food, you name it, it keeps going up. Greed, Greed, Greed. The almighty dollar. It cost nearly $ 100.00 to take a family of four to the movies. That's almost 1/2 of some peoples paycheck. Then they wonder, Why aren't people spending money. Then the borders are opened up for all kinds of imports putting people in the U.S. out of jobs. And the illeagal imigrants dragging down our welfare and retirement systems. Doen't anyone have the balls to do what needs to be done?  What part of duh does our "Leaders" Not understand. And as far as our next President, Mclain may not be the best, but what kind of person elected to be the  leader of this country ,will not display our countrys flag on his jet? And some people of this country are stupid enough to vote for this imposter.