Well, I'm sick of having to deal with other people's problems.

Too many people are willing to borrow too much. The going-rate price of real estate isn't based on ability to pay, or even borrow -- it's based on willingness to gamble. Same applies to my property/tax assessments, insurance costs, etc. We all suffer due to predatory lending and a runaway borrowing/materialistic culture.

I'd be happy to own a home outright before age 40, have a stay at home spouse to raise my kids, and work no more than 20 hours/week, in order to enjoy family, hobbies, get engaged in the community, start my own business, etc. But because so few people share this value set, I'm forced by market pressures to the lowest common denominator.

When are people going to take responsibility for their actions. Here we have a executive assistant with a BANK, who along with his wife purchased a home in 2003, obtaining a FIXED RATE on thier home loan. Unfortunately, the article does not tell the reader what the fixed rate was. So we are not privy knowing if their rate/program was sub-prime or conforming. The article does report he and his wife decided to refinance at some later date. But it does not report for what purpose, if to receive a lower rate or perhaps tap into the equity of their home. It's possible this young man and his wife decided to refi inorder to tap into the growing equity of their home- remember the home is located in California where housing prices were sky rocketing before the bust. Its not secret, homeowners with equity in their homes used them like an ATM machine to payoff mounting debt created by themselves. Perhaps this may have been the case here. The fact that this gentlemen felt "STUCK" with an interest only option may indicate he was desparate for cash - unfortunately the article does not give the entire story. Clevon a assistant bank executive and his wife could have said NO to the deal and walked away. This may not be the best example of persons who were preyed upon by a unscrupulous lenders.

Well, they are all stellar ideas and would work marvellously for subsistence or existence, but is that all the poor deserve, being allowed to exist? We will hope dichterfreund was being wry. I think the last sentence tells us that was d's intent.
It's the other posters, ndombo, steinman and jjpeter who worry me, they would probably second d's suggestions seriously. I am gravely concerned by those attitudes, especially among those who profess themselves progressive..I am in agreement with you, Paul Bramscher.
I walked by the old Gillette building in St Paul and saw a down comforter, a radio and a few other items that spoke of someone living there in the doorway. I thought " There but for fortune..." and I think a few others could stand to think about that.

"Don't live large" should apply initially to those who have lived the largest. Most of the wealth accumulated in the US in the past few decades has gone to the top-5% and the 50+ age demographic.

While we clearly need to get a handle on runaway consumerism -- there is a point at which self-sacrifice borders on the sado-masochistic.

There must be some Middle Way, midway between sensible self-sacrifice -- and a much-needed Robinhood wealth/property redistribution, to level the playing field. To return money to those who work, and -- simply -- to take it away from those who've gained solely by having money.

Limiting your mobility to a point not seen since the Middle Ages is insane. Easy pickings for tyranny. Limiting your education, your ability to communicate, etc. all insane. Limiting your debt, certainly is worthwhile -- no need to assist the parasitic usury industries. I take it your post was half tongue-in-cheek dichterfreund?

My point exactly, Dichterfreund, thanks! I think it would be nice if some those who consider themselves progressive really understood that they may have the luxury of 'living' as opposed to simply existing, and they don't mind giving tough love advice to those in tighter circumstances that they would rebel against themselves. We'd rebel ourselves except we don't have enough spare time with the two jobs and children.I'd love to get involved in all sorts of causes and also go to the theater, but I am content to eat now and then!

The way to avoid debt:

First, avoid college at all costs. You will have to take out loans, which you then will not be able to repay. So stay semi-literate.

Take only public transportation; never get a car loan; use only bikes. Obviously, you will never take a family vacation, and since you have taken out no college loans, this probably will not be a problem, since you will probably not have the qualifications to get the sort of job where people will start to lend you money anyway.

Be part of a church which requires regular fasting, like several times a week. You'll save lots on groceries!

Wake with the dawn and go to the local library (if it hasn't been shut) or linger in a mall buying nothing -- that would show irresponsibility! -- some place where you don't have to pay for the electricity. Keep the utilities off at the house.

Buy no communications devices whatsoever. No television, no phone, certainly not a cell phone or computer, or you will be accused of bad decision making.

The best solution for all those who "live too large" or are "personally irresponsible" is to find a place to dig a series of tunnels near an urban area, live in a hollowed out hillside -- good enough for hobbits, why not for humans? -- and subsist on game & berries. Our ancestors did it -- why can't we?

-- God, Americans have become such a crabbed bunch of moralists straight out of Oliver Twist or Hard Times . . .

I am a little surprised at the tone many of my fellows here on CD are taking about people who have lost homes in this debacle.
When were you last in this type of situation?
My ex-husband was nearly persuaded by a friend he trusted who had gone into the business that there was no risk in a sub prime mortgage. The other guy was suppoesed to be both an expert and a trusted friend!It was so enticing for my ex to finally maybe have a nice home within his reach, that if I hadn't said that I would have no part of it that he finally backed down.
I have an old car, a student loan( for a profession I seem to be unsuited to), rent a 1 bed apartment in a poor urban neighborhood,pay 50 bucks a check for health insurance with a $900 deductible, have $3,000 of credit card debt due to frivolous things like dr. bills and a service for the car.I don't have DSL, cable, mp3 player, an ipod or any civilized things except this old handed down computer and an old TV that doesn't work very well.I make $11 an hour at two jobs.Is this "Living large?" What do I cut next? I like a roof over my head, regular meals and I would like to buy my grandchildren the occasional present. How is this done, and where would you recommend might I cut some of the unnecessary expenditures? I wish I HAD an expendible income I could spend on travel and charities, and what the hell do you save out of this mess?!
My point being, people get sucked in by the hope of a life that is more secure and the allure is such it can lead to really bad decisions.I'm surprised that many feel that a wish for security is interpreted as a ' keeping up with the Joneses' mentality, when often it isn't.Its a desire to live securely, even if that is outside of their ability. Security should be something we all can have.

I too agree with Steinman and jjpeter. The conspicuous and insatiable consumption (of mostly rubbish) is what puts many people in trouble. Producers of non-essential goods and lenders of money have conspired to rob all of us of our hard earned money. If we are unable to say no, we can only blame ourselves.

My largest expenses are taxes and private education for my children. Food, gas and rent come next. We use our expendable income on buying what we need, travel, charity and we save the rest. Many Americans couldn't come up with $5000 in cash for an emergency without having to borrow. That's absolutely insane.

Resist the temptation to "live large." And if you do, and you're not independently wealthy, you're simply borrowing from your own kids to pay for plasma tv's and some such nonsense that you couldn't even sell for half what you paid only a year later.

Here's a simple formula: if you can live for a year without any income and pay all your (ESSENTIAL) bills and not have to borrow any money, you're in charge of your destiny.

The ideal citizen for those who have contempt for democracy is a citizen up to his or her eyeballs in debt.

Minorities are also disproportionately more likely to be in poverty, unable to afford college, less likely to be inheriting wealth/power/status of their parents, etc. You can't take a nation which spent the first 300-400 years with an economy based on slavery (blacks), ethnic cleaning (Native Americans), serfdom (indentured servitude and tenant farming), post-slavery (company towns, illegal immigrants, absentee-owned Big Boxes, offshoring, etc.) and expect to yield anything but the same crap.

I suspect that if we were to examine the trends in the last great depression -- as well as the current one we're heading into -- and the demise of the family farm (especially in the period of the 1960's to 80's) you'd find some interesting trends within the caucasian demographic itself.

Poverty, like wealth, is largely inherited.

No sh_t! Minorities are hit hardest by any economic crisis...

I'm in agreement with correctivelens and Jan Steinman,

The notion of delayed gratification has become antiquated, even laughed at these days.

We have become a nation of predators (not all of us of course). A once respectable segment of the business community, lending for large purchases, has become a shark infested tank. Its buyer beware, or else. And I feel a sense of desperation seeping into the national consciensness. Its a -I have to grab it all while I can still afford it- sickness.

You see in all the spam emails about refi's. The jerky ads on the margins of web sites, with their teaser rates, and in the end, just a bait and switch trap.

So those trusting souls, believing in who they were sitting across from, who just don't have the capacity to understand the fine print, are targeted, and often by those of the same race.

Live within your means, live simply, find joy not in things, but in each other.

Jan Steinman is right - before we blame the lenders and their governmental overseers (although they're not blameless), we need to blame the culture of debt.

According to the Bureau of Economic Analysis, American consumers are - on average - spending more than they make. That's a negative savings rate! (source: http://www.bea.gov/briefrm/saving.htm). The last time that happened was in the Great Depression. Think about that for a moment. (http://www.bankrate.com/brm/news/sav/20060308a1.asp)

There are many factors to blame. The economic orthodoxy of perpetual growth. Lack of regulation of lenders, perhaps. But most importantly, the culture of individual consumers to consume, consume, and consume. Nobody is swiping that credit card for us. It's up to us to make do with less. Drive a Hyundai, buy a smaller house - whatever. If you can't keep up with the Joneses and they snicker at you - let 'em! You can snicker back as they drive off to bankruptcy court.

Back to the article - I pity the man for losing his house, but I don't care what color his skin is; I realize it's probably his fault. He bought a bad loan product. He made a bad decision. In short, he probably overspent big time. And when you spend someone else's money, eventually you have to pay. Remember, it's up to us!

"7 of the Most Important Economic Events of the Last 7 Years: The Buildup to World War III"
http://www.chycho.com/?q=Economic_Events

"In the US the competition between these lenders became so fierce that "when the rates were getting too low, they switched to competing by way of advance ratio versus selling price."

"In other words, if lender 'A' was offering 90% financing, lender 'B' would go to 100% financing, then lender 'C' would advance 100% of selling price plus costs, then to 105%, etc. We have seen the U.S. equity lenders now go to 130% of selling price, giving back 10-15% to the purchasers to help buy furniture, large electronic products, groceries, while the remaining 15-20% was eaten up in fees."

Why would a lender risk giving someone 130% of the value of a property, especially if the people are considered to be high risk? Fractional-reserve banking of course: A system that has been established to allow financial institutions to "loan their customers many times the sum of the credit reserves than they hold". It's a pyramid scheme in which everything continues to work until the bottom falls out, and the bottom has fallen out in the United States where "States have subprime exposure between 18% to 30%" and early payment defaults are rising. This problem with the subprime mortgage market is intensifying with the US and UK housing market crashes."

it's a fact that non white communities have been neglected not to mention non white communites have been seperated from white communites and stigmatized as hostile environments and fed all the necessary components by government operatives for decades for failure whether it be guns or drugs (I grew up in them) while we are on the subject of race by no means do i want to dismiss the fact that us working people of all colors cannot afford housing(that is why i left boston and moved to las vegas unfortunately if you know the boston housing market) we all want a roof over our head,health care, education and a living wage, any factual subject that shows how this costly phoney war is more meaningful than what our needs are not to mention the high risk in crime that is plagued because of war spending and neglect is always a story welcome here racial or not.

indijo,

Even in the rust belt, where poverty is probably more "equal opportunity" than anywhere else, the black poeple suffer disproportionate povery and flagrant, and I mean flagrant recism and discrimination. This last Thankgiving morning, two black families in a duplex in an otherwise pickup-truck and SUV filled white neighborhood near my home (The black families not owning a car at all) found a burning cross in their front lawn.

The local media reported it but downplayed it as just a harmless prank by some kids. The black mothers, to their discredit, seemed to downplay the incident too - one just compaining about the fire hazard and the other saying she didn't care because she "trusted in the lord". I heard that some black activists might plan a demonstration at the house if they do, i'll be there. But if they do, the police will no doubt pounce on them - tazers and pepper spray blazing. But my white skin will protect me.

Okay, I agree that "these people" are being targeted, and that's wrong, but for heaven's sake, what happened to personal responsibility?

He turned down a fixed-rate loan in favour of something that probably seemed too good to be true at the time. This guy WORKS AT A BANK, for heaven's sake! He should know better!

If something seems "too good to be true," it generally is. What is needed is more education. I was raised to avoid debt, and to pay it off as rapidly as I can. That has served me well.

Unfortunately, debt-avoidance as a central ethic doesn't serve the financial industry very well, so they command their puppets (politicians) to do all sorts of insane things like turning houses into tax-deductible credit cards and turning homes into "investments." People are encouraged to buy houses bigger than they need "for resale value," rather than buying smaller houses they could pay off quickly.

The future has been uncertain for far longer than most are willing to admit. Stay out of debt. If debt is necessary, borrow as little as you can, and pay it off as fast as you can. Heck, choose a smaller, more affordable house! (Blasphemy!)

Todays debtors will be tomorrow's indentured servants. Minorities should be taught this. But who is going to make sure they get that message? The government, which is beholden to the banks? I don't think so!

Race biases huh? Does the phrase "institutional racism" mean anything? Its been around since slavery. Today, its what I call "racism with a smile" - denying a loan based not on race but on "risk," or offering high-cost loans that no working class family could pay, regardless of color. However, black folks are losing their homes at a way faster rate than whites, as demonstrated here. The NAACP is right to sue, and ACORN is a fine community group highlighting this plight.

I'll probly be accused of racism for this but I am getting sick of the idea that only minority groups are poor.

While I certainly do not doubt that minorities are getting hit hard by this economic slump, I believe it would be much closer to the truth if articles like this started pointing out that ALL WORKING CLASS POOR Americans are equally disaffected by it.

The simple problem is that there are still far more blacks and hispanics that comprise the majority of poor and far more whites that comprise the wealthy upper and middle-classes.

But this should not give the media cause to completely ignore the fact that there are still quite a lot of poor working-class white people (the number has been increasing since Reagan changed things) equally disaffected by these economic problems.

What we have to realize is that, Reagan and Bush41 paved the way for more whites to be equated with poverty and minority classes, and less minorities to be equated with wealthy whites than a democratic administration would have enabled. Reagan and his followers helped to equalize whites with minorities by making more whites poor, not by making more minorities wealthy. Pretty clever, eh?

Dear Subprime Lender:

Our household has not been immune from this 'economy thing' and, as a result, our mortgage check will be somewhat delayed. Our financial resources have finally dwindled to the point where our ability to make payment is affected. Our living expenses have been cut back to the basics and we're still cash short to cover the mortgage payment, which is our largest expense next to taxes. We will resume paying the mortgage when our financial situation improves. It's not like we haven't been trying. It has been and continues to be very frustrating.

You may decide to proceed with eviction. Before doing so, you should know that we consider the dwelling our home and home is very important to us. Since those events that control the economy are way beyond our control, we don't plan to suffer disproportionately for something that's not entirely our fault, and since there is no safe haven from this 'economic thing', we prefer to stay in our home until whenever. You have the power to initiate or to not initiate the use of legal force that will be required to remove us from our home. Should you initiate the use of force or harassment, at whatever level, you will share proportionately. Friends who share our outlook and temperament are aware of our situation. The level of escalation is your call.

Please don't take this personally, these are just business risks that the bank must have, or should have, considered when investing in people's homes. The business climate has certainly changed.

There's no place like home.

Sincerely yours,

Subprime Debtor

http://theformofmoney.blogharbor.com/blog/_archives/2007/4/13/2878726.html

whenever I read these kind of horror stories my mind wanders to that magic moment in time when nazigeorge did his inaugural speech in 04 in that stadium talking like he was god and saying that this will be an ownership country and how much he stressed we will all be homeowners another lie to americans of course,now he says it's not the federal gov't's problem to fix it or as he contorts in his devious twisted brain another reason to impeach, Nancy, get off your prime rib eating high horse you paid off traitor and care about the people who make our country work!