cheesgames56 - Maybe you should have waited to have kids until you could support them. This is another thing my wife and I did. I prefer to pay to raise my kids and give to the charities of my choice, rather than supporting those that cannot wait for gratification. You are very correct about how fast things can change. That is why I still eat tuna from a can and we live way below our means. Tuna is very nutritious, along with other inexpensive foods. It is tempting to buy a big house like the ones in the article above, and my income would allow we to borrow the money to do so. Instead we live in a modular house that has the minimun sqaure feet allowed in our township. We have always planned for the worste and hoped for the best. I prefer to keep my savings for my family in case things go bad rather than paying for the extravagances that led to this problem.

I quit my profession as a Professional Land Surveyor because I no longer wanted to be a cog in the system of hyper-consumption. Being involved in building dozens of subdivisions of McMansions was one of the items that put me over the edge. I could never afford to own any of the houses I was helping facilitate, but then I wouldn't have wanted to. Architectural eye candy which is the hallmark of McMansions is so wasteful of materials considering it is non-essential to providing sustainable shelter. That experience along with building shopping centers next to shopping centers next to shopping centers and I had to quit before I had no conscious left. Many times I was one of the last to see a natural place before it was turned into something unnatural. That really began to eat at me, especially because I knew the developers could give a shit about anything except money.

There's plenty of blame to go around. Mammon smiles pleasantly at everyone, and has such an enticing voice. Many tagged along behind and were eaten. If the term "sustainable growth" within a closed system is not an oxymoron, then someone will have to 'splain that to me.

You sure all that mercury didn't get into you head, Mr. Obvious? No offense, but you seem rather self-righteous. Consider for a moment that many are already being thrifty, but cannot, as you say, eat dog food or tuna from a can. We have children and must feed, clothe, and pay exorbitant medical and dental bills (even with insurance there are endless copays and deductibles).

Now, I DO agree one must be responsible insofar as possible, but there are just times when folks need help, especially with the present economic policies that export jobs and import cheap labor, keeping wages low with respect to cost of living.

I'm happy things are presently going well for you, but that can change in a flash, as it can for all of us. Not all down on their luck are ner-do-wells, and their bootstraps are just as sturdy as yours.

If you have a morgage, you do not own your house, you are "renting to own" from the bank. Stop paying the rent and the bank continues to own the house. Save up the money to buy the house, then you are a home owner. This means living way below your means and eating tuna from a can. I know, and it can be done. No eating at McDonalds, not at all. If this is too hard, then take your chances with the banks and get what you deserve for not being able to delay gratification. Sorry, no pitty for the forclosure victims with large screen televisions and a new car. Think this is the exception? - Try again.

I would like to nominate the Megadeth song 'Forclosure of a Dream' as the anthem of 2008. It's lyrics, written about farm forclosures, seem so appropriate.

>>If you have debt, other then a reasonable mortage and a car payment you are paying down, and you can't pay off the discretionary spending you do on your credit card and your cost of living bills (phone, energy, insurance, cable-ugghh!, etc) then you are eating your seed corn. The season for planting is now, and if your seed is gone, the harvest next fall will see barren ground, and a deadly winter will follow.<<

Chauncey Gardner couldn't have said it better.

Mr. Obvious says, "If you gamble, then sometimes you lose."

Maybe you should change your screen name. When we speak of gambling, there's at least an implied chance of winning. The housing bubble, like every other bubble before it, was designed to produce winners at about the same rate as a game of 3-card Monty.

We used to have cops on the beat to see that rigged games and their shills were rousted as soon as they set up.

But now the scammers own the cops.

Mr. Obvious

What would be the difference between a small sustainable multifamily house and a large public housing facility?

Teeefrog - government entitlements have not given this a chance.

Mr. Obvious

Obviously, that is not working...

Treefrog - I believe that ownership is earned and that is the incentive to move out of temporary housing.

Mr. Obvious

There is probably a need for both but temporary housing or half-way housing doesn't confer the ownership or equity which would provide incentive to prosper and insure a legacy that is sustainable.

We've been sold a bill of goods and thought we had the best of all possible worlds. The corporations are out to sell. Bottom lines are everything.
Consumer Beware.

If you've ever lived in another country (the way the locals do) you know its possible, even probable, that there are alternative ways of living, many of which are far easier and more satisfying than the way we live in the USA.

People near me who pressured others to borrow their home "equity" to vacation, improve homes, buy cars,
are no longer laughing at the resisters. Guess which ones are now in foreclosure or facing it any month.

Socialism seems ideal until one considers that those who gain power will always become corrupt.

Treefrog - Great idea, but how about converting the places to hospices for anyone who wants to live there? This way only the poor would choose to live there and they would have an incentive for finding a way to become self-sufficient.

If taxpayers are funding this as an interprize, we should seize the property and convert it to sustainable homes for low income people and the homeless.

hazmat - We finally agree on something. If you gamble, then sometimes you lose.

first came the repeal of glass-steagall and other post depression-era safeguards, which allowed banks, insurance companies and brokerages to merge. then came the inflating of the bubble, in which people anxious to "beat the market" borrowed to buy properties expecting their value to rise---which, for a while, did.

then came the popping of the bubble. historically, each time a bubble has been popped, many billions of dollars of real wealth has changed hands, invariably from those with less to those with more. the real invisible hand is the one wielding the needle.

the next bubble is being prepared as i write. the "business cycle," or "boom and bust," is no more natural or inevitable than the child's game of musical chairs it so resembles.

the moral of the story is simple. live within your means. don't sign anything you don't understand. verbal contracts aren't worth the paper they're printed on. if it's sounds too good to be true, it probably isn't true. you can't beat the market---you ARE the market.

According to the good folks at the American Enterprise Institute and the Ayn rand Institute, we're all supposed to carefully read the mortgage contracts so we know what we're getting into. Seems that us regular folks are just as guilty of not understanding the reams of documents that protect mortgage companies as rich folks.

Of course, we as house purchasers are to blame for this mess and the mortgage companies' hands are clean, right?

Wouldn't it be nice if builders focused on building practical, passive-solar, energy efficient houses instead of these monstrosities?

HEDOLOGY: Excellent analysis to which I concur.

Soon the government will need to buy up those McMansions, subdivide them into lots of smaller living spaces and house the tens of millions of homeless, at a subsidized rate. Or else those abandoned properties will become squatocracies. Of course such an action will make the prices of property fall even more. The wind has gone out of the financial high living sails, and the US way of life has finally hit the rocks. The question is , what, with the current standard of US government, be done to rescue the drowning? What kind of government lets people live on less than one meal a day, and have them become homeless? Answer: A stupid government that believes in self help alone makes a nation great. There is no US nation anymore, because there is scant US community spirit. A media full of drivel and lies does not make a community. The government is asking every drowning person to swim for themselves, while everyone with money is to keep it to themselves.

ascott, I read elsewhere that a sizable portion of their charitable contributions went to their own foundation, which has conveniently made donations that look suspiciously like timely campaign "earmarks" for Hillary. The CSM didn't mention those donations. There's no proof that she's out there buying super delegates, but the Clinton foundation has certainly made donations that have benefited some of them.

kathyodat

joseph paquette 7th 5:16 pm

Hold onto your hat! The Christian Science Monitor just reported that the Clintons earned $109 million during the last eight years.

http://www.csmonitor.com/2008/0407/p04s02-uspo.html

Just think of all the farmland destroyed since the last Depression and the McMansion's hugh footprint negates room for a garden to even grow a few veggies. Of course this doesn't matter much because Homo sapiens domesticus thinks that food is just something slapped together at the local McFast food joint or magically appears on Supermarket shelves. What a rude awakening these people will have when the oil runs out and the world goes through the biggest bust in history. Really sad that we have no foresight to head off this disaster when it was evident back in the 1950's and earlier what was coming our way. My favorite poem said it all way back then and as usual few read or listened and not much has changed.
***********************
Conservationist's Lament
By Kenneth Boulding
In: Man's Role in Changing the Face of the Earth, 1956
University of Chicago Press, p. 1087

The world is finite, resources are scarce,
Things are bad and will be worse.
Coal is burned and gas exploded,
Forests cut and soils eroded.
Wells are dry and air's polluted,
Dust in blowing, trees uprooted,
Oil is going, ores depleted,
Drains receive what is excreted.
Land is sinking, seas are rising,
Man is far too enterprising,
Fire will rage with Man to fan it,
Soon we'll have a plundered planet.
People breed like fertile rabbits,
People have disgusting habits.

Moral: The evolutionary plan went astray by evolving Man.

I can hear the guillotines being sharpened now.

It isn't even decent plywood, it's mostly chip board they use and support beams made of sawdust and glue. Talk about chemical emmissions in a home. Then so many are stacked six feet apart. Reminds me of a monopoly game board. Stupid, stupid, and the buyers have no idea of the enormous costs to heat them. I find it amusing that they do have great attic insulation, then put in six or more huge sky-lights and the heat goes right out.

In a small town near where we live are hundreds of 80 year old shanty houses built for the miners families and originally owned by Phelps Dodge. They are on the market for $170,000 up. Tin roofs and all. Incredible. Right now they aren't sellng very well.

Plywood Palace- great name for a country band!

I live in a Roach-infested sh-thole that I pay almost 600 a month for. it includes utilities(thank Eris), but it's still more than these morons will have left. I get by ok for the moment, but I know that can change in a second, leaving me with nowhere to go. I'm just glad that Honey and I never took the bait when we got offered a chance at one of those "Planned Communities." Just an overpriced deathtrap for Yuppie Scum.
I just laugh when I think of them eating Beanie-weenies out of a can in their massive Hummer, parked outside their worthless Spanish-tiled Plywood Palace.
Screw them. Screw them AND their little purse dogs too!

Already the soccer moms are tearing up over having to -GASP- buy store brand and WORSE actually being caught carrying it out to their SUV. Don't worry, their kids will get over not having their Wonder Bread and Miracle Whip. Welcome to the proletariat!

Always make sure you stiff banks as much as they stiff you.

In 2004 I filed for bankruptcy and $28,000 worth of credit cards, department store, etc. debt was wiped off. I was able to keep my co-op and now live a debt-free life. I'm just sorry it wasn't $280,000 I owed them

That was before Hillary and other mobsters in congress changed the bankruptcy law, of course, under pressure from the credit card companies. Now it's a lot harder as I understand, but people should still try.

Don't worry about bankruptcy remaining on your credit for 10 years, who cares, I started receiving credit cards offers immediately, which I always turn down.

One more thing: never never EVER consolidate. That's simply adding a middle man to the list of people ripping you off. Just file for chapter 7, screw the financial powers.

CSchnack: "…that the industry was in favor of capitalism when they were making money, but now wants a govt bailout."

SOCIALIZE THE RISKS!!
PRIVATIZE THE PROFITS!!

Now THATS what I call a FREE MARKET.

Thank You Gail

The link is indeed a must read.

Quite a few of these high-end borrowers were probably too busy stuffing cocaine up their nostrils to read the fine print.

Mr. Obvious April 7th, 2008 5:19 pm

"Bail them out and that will prove that they are not so stupid. We pay for their need for immediate satisfaction. What a great lesson to teach their children. No wonder we have multi-generational welfare families."

I guess we can say the same for the creators, packagers and sellers of these exotic mortgage products that helped create this mess in the first place.

The United States has a history of bailing out banks and other corporations at tax-payer's expense. Prior to the $30 Billion Bear/Stearns bailout, Congress approved the printing of $200+ Billion for the Federal Reserve to allegedly loan to other banks that were in trouble. And as of March, 2008, our government will be printing (increasing the money supply) by $100 Billion "per month" until they no longer deem it necessary - all at the taxpayer's expense of course.

We can also ask why the top managers of these failing or failed institutions walked away with hundreds of $$millions in bonuses, pensions funds, etc. while taxpayer's are bailing out the companies they helped destroy. Should we be rewarding these people by letting them walk away with $$millions after participating in this scam? Wouldn't you agree that we are also paying for their "immediate gratification" and perpetuating "multi-generational" corporate welfare?

The following link nails the issues that need to addressed in this country by the citizens and this government.

http://www.financialsense.com/fsu/editorials/russo/2008/0401.html

right you are, jcrumb. here in my small-time tourist town texas, the realtors, snakes that they are (all of them), are beginning to place their investments on the market. at super inflated prices. 1,000 s.f. home, wood frame, circa 1940's, or later. tagged at $419,000.00. or this: 1,200 s.f. ditto on the construction, $469,000.00. both instances, owned by realtors as "investments". i could go on. bottom line, these assholes are trying to keep prices inflated to cover their own asses. sadly, at least for them, the piper is calling. it's gonna be fun to sit back and watch the show.

goner

I don't see why the mortgage deduction should be there at all. All it does is artificially inflate the cost of homes at the expense of the taxpayer. And why is home ownership such an important social goal, anyway? I don't think the taxpayers should subsidize it, and I am very, very wary of further subsidizing houses (and inflating their prices) with bailouts of borrowers.

" Add to that the banking industry tightening credit because they are clueless about which of their assets are safe and the Fed printing money like a drunken sailor, lying about inflation by excluding our inescapable costs of food and energy which are skyrocketing, and we do have a perfect storm coming on us."

This business of excluding the increasing costs of food and energy is a pathetic trick our governemnt has pulled for years, and these items increased more this year (2007) than since the early 1970's. The problem is, it is not only a dishonest number being reported to the public by our government in order to make the current office holders look as if they are in control of a great economy, the inflation rates, excluding food and energy, are used to determine C.O.L.A.'s annually for those receiving Social Security retirement and/or disability benefits. This past year, in spite of having TRUE inflation (~14-16%) higher than any period since 1970, the cost of living adjustment for inflation for Social Security beneficiaries was a mere 2.9%. I am a recipient of disability benefits and have been since 2003. The annual COLA's have been between 2.9% and 3.2% since I begin receiving these benefits. When I began receiving the disability benefits, I was able to afford a VERY modest one bedroom apartment and food. I did not own a vehicle. Now, I cannot afford food (I consume 1 meal per day), and am in the process of moving out of my apartment as I cannot afford the increasing rent. Okay, so one might say that even with a severe disability, there must be SOMETHING you could do to make a little extra money. Well...no. If you are receiving disabilty benefits, you cannot work at anything for more than 9 months and during that nine months, you may not make more than $900 per month.

Frankly, I am tired of the blame game of who is responsible for the subprime bust. The bottom line is that many of these loans were indeed fraudulent. Further, in the rush to grab as much money as possible, prudent lending practices were ignored. Now that the financial industry is reaping what they have sown, we the taxpayers are being asked to bail these bastards out. Meanwhile, our federal government gives tax subsidies of in the neighborhood of $15 billion to the oil companies who are at the same time reaping record profits at the expense of our economy and public. I do not appreciate my tax money being used to provide welfare to the greedy rich corporations who have cut their own throats because of their greed while I cannot get enough money from Social Scurity, money that I have earned and paid into the fund, to eat and have a decent place to live in the event of an emergency.

Republicans...the only good one is a dead one.

To address Mr. Obvious's first question, Senator Dodd called it what it is (although he doesn't seem interested in fixing it): "the privatization of profits and the socialization of risk" for big businesses. It has become the American way.

You are right jjpeter. Without living from or within a greater consciousness--one that excludes ego-dominance--we are just like leaves in the dark wind of night. Presently, there seems to be more interest in inner awakening, but , at the same time, there is an increase in the density of evil and darkness as well.

It's not a matter of which side will 'win' or 'overpower' the other, for that again is the interest of ego. The light (consciousness)has already 'won over' the darkness (unconsciousness); really, there was never a battle between the two in a higher sense. However, it is a 'victory' the individual must claim for himself because that's where--and only where--the 'battle' rages.

Can't say I have any sympathy for the droves of idiotic 'middle classes' who've ignored all their education and upbringing and bought into this false economy of endless real estate appreciation. It's just unfortunate that the US government has allowed the much unregulated banking industry to dictate the market and create this huge commodity bubble with low interest rates. Americans as a nation should be ashamed of robbing a generation of their future with the human rights disaster that is the occupation of Iraq, but Americans as a people should hang your corrupt political and financial leaders in the gallows for robbing you of your own futures.
The end result of this upcoming depression will be as it always has been. A mass killoff of the middle and lower class through war. Unfortunately, there aren't a whole lot of resource rich paper tigers on the planet anymore.

~RUDYJO~ You mentined SS checks. When the depression hits, there won't be any SS checks, or any other government checks. When a new form of government finally rises from the ashes, it won't be a democracy. It will be the ones who have the gold and the atomic weapons under their control.

Over population will not be a major problem either.
We can easily have a depression this year and those side by close side, termite-trap McMansions, built with two by twos and chip board, will be sitting empty without heat or electricity. Some wil be inhavited by roving armed bands who will use the fancy looking fireplaces for heat and be cooking grass, stray cats, dogs and rodents for their evening meals.

GOOD!!! Take a taste, Elitists!!!

I agree that people ought to live within their means. Clearly the people who own(ed) McMansions knew the risk they were taking. Thinking they could cruise to retirement, instead of landing on red, the roulette wheel landed on black, and the dealer gladly took their money. I do not mean to sound callous, but I cannot sympathize with these people. And what angers me is the government is trying to bail them out, which is unfair to the rest of us who live within our means. They obviously sought to live the high life, but it came crashing down. Get used to eating bread and soup with the rest of us. Sometimes if you include the right spices, the soup tastes better than the Porterhouse steak.

Time to start buying bicycles and dump the gas-guzzlers. I wouldn't be surprised if, before long, we had a "role switch" with China, where they will be commuting to work in gasoline-powered automobiles while we will be pedalling our bikes while looking for work.

If the poor are so stupid that they can not be trusted to make their own financial decisions, then maybe they should be taxed at 100% and the government should provide all their needs? Sounds like communism to me and we all know how well that works. In a free society, people are free to be stupid, but don't punish everyone for the inability of a few to delay gratification. Bail them out and that will prove that they are not so stupid. We pay for their need for immediate satisfaction. What a great lesson to teach their children. No wonder we have multi-generational welfare families.

Silly people who are buying houses right now are in for a surprise. This downward trend is just beginning and that 'so called' deal you think you just landed won't be worth the price you paid.

Don't listen to your neighborhood realtors they are just as guilty for causing the sub-prime implosion because they knowingly inflated the prices of the homes. Realtors (not all of course, some are not quite like greedy lawyers) only working with appraisers that were willing to inflate the price of the home was one of the many problems we are seeing now. Inflated prices get bigger commissions. We need to push to make the MLS database public! Regulation of appraisers (like building inspectors) would not be a bad idea either. We can not expect the realtors to regulate themselves anymore.

The market is still undergoing a correction and by the time it is over homes will be almost reasonable. How will you know when the market hits bottom? At about the middle of the America's current long term recession... Or, when California has only half of its 500 thousand licensed real estate agents.

We are now living in "The New World Order", Those are the preaching words of Bush Number one, and Clinton
bought into it. The Mega Corporations are taking over and buying the universe, and making us slaves, without
a word from our elected officials. The Clintons who made some $9,000,000 in a few years still want to control what's left of the empire, and the Democratic party
is to scared to oppose this corrupt group.
The Political machines have become slaves to the
Corporatists..When Hitler killed millions of jews,
the German population claimed they did not know.
What does our population know?

Kem Patrick; 88,000 people who will not be going to Home Depot or buying a new car. It takes one
who is living on a social Security check to realize this, but there are now 88,000 people who
are no longer paying into the Social Security Fund. This will efect everyone who expects to get
something out of this someday or are on it now. Not getting a S.S. check someday doesn't matter
much to the super rich, but like most things, it's the little guy who will suffer to pay for the
screw-ups of the greedy.

Matti and Kathy: thanks for the balanced comments on this topic.

Many comments on the subject of foreclosures suggest that all struggling homeowners were "greedy" and looking for ego gratification. On the flip side, renting isn't cheap, either. Landlords raise rents (to offset their operations costs). Plus, you can't pick your neighbors and there are no tax benefits to giving your money to the landlord. Before we hit the economic iceberg, owning a home was a practical investment. True, many people have used their homes as ATM's, but many haven't.

Fortunately, I knew about the impending financial meltdown before I lost my job, but I've still struggled over the last five years. With skilled jobs disappearing overseas, many of us have had to take pay cuts, extend our commutes and change fields altogether. I've been unemployed now for over six months, along with many other professionals. And every week, more people join those of us who were laid off.

IMHO, the next step will be a community-based effort to revive industry in the U.S. I believe that out of this mess will come entrepreneurs with fresh ideas and new ways of doing business - out of absolute necessity. It will be a grass-roots effort, probably beginning with cooperation and bartering. It will be a battle to overcome apathy and years of social programming. But I see in our weekly professional networking meetings in Northern Colorado that the distaste with being dependent on others for table scraps is rousing people from their slumber. Cutting down on unnecessary "stuff" - again, out of necessity - will remind people how they give their power away to the elites and hopefully it will help people refocus their priorities from inanimate objects to people.

The picture isn't rosy by a long shot, but there is some change in the air. And it's not a moment too soon.

I remember reading a Wall Street JOurnal Article a few years ago.. when the mortgage rates were uber low. Basically what people were doing was buying a House (a BIG house mind you.. probably one built only in the 80's! although i think they said most were no more than 10 years old!) and RAZING THEM to build these UBER mcMansions.

I was appalled!!! The waste,!!! Not just added on.. but RAZED the entire property!!! THat is disgusting!!

THis is the FALL OF ROME most certainly! and our POlitical elections is the equivalent of watching the Roman spectacles of lions eating people!

I'd like to know how many of the buyers in the article used the builders' in-house lenders. Builders opened their own mortgage co's, (or had affiliations w/lenders like Countrywide), and got right in on predatory lending. They sometimes violated lending laws like requiring the buyers to use their lender. Buyers is a broad group that can include everything from people involved in fraudulent flipping schemes to people who were truly victims of forgery, etc, and every shade in between, including ordinary people who were blinded by snazzy window dressing and greed.

But, no doubt in my mind the industry insiders who contibuted to the bubble and bust knew what they were doing and invented the schemes. Many in the industry and certainly govt knew this could result in damage to the U.S. economy, too. Nevertheless, warning signs issues years in advance were ignored while crooks made money hand over fist and are largely going to get to keep it, while tax payers pick up the tab.

How much faith do you have that our govt can sort out who's a victim and who's a crook, and what level of deceit is required to fall in the victim category? Do you believe our govt will jail any of the real perpetrators in the industry?

The industry that created and pushed toxic loans, coerced appraisers to meet the number, and built shoddy new homes in many cases, too, is asking for a multi billion dollar bailout from congress. The longer the politicians debate it, the more provisions for homeowners go away, and the more benefits to the industry are kept. As predicted, the housing industry's whining for a bailout was packaged as being "for the homeowners," but ends up being corporate welfare for builders, etc. Seems like plenty of online news and commentary gets the hypocrisy of this...that the industry was in favor of capitalism when they were making money, but now wants a govt bailout. But sadly, little is said in mainstream news, where most people still get their info, about what is really going on.

This is SO SATISFYING...although the really GRIM part is that the once OPEN SPACES are gone forever...greedy assholes that got city councils with seven out of eight council members being directly or closely tied to the real estate market and or developers..making ANY and ALL rule bending decisions that they could to accomodate these disgusting testaments to bad taste and poor craftsmanship...AND not only that..BUT WHAT IS IT WITH "BEIGE" WHY IS EVERY FUCKING NEW McHOUSE "BEIGE"? WHY? WHAT THE HELL? IS THIS SOME KIND OF MASS DELUSION? SOME KIND OF STRANGE BRAINWASHING LEMMING TRIP THAT EVERYONE IN ONE OF THESE "HUMAN STORAGE UNITS" ACTUALLY WANTS TO BE NO DIFFERNT AND EXACTLY THE SAME AS THE HOUSE 10' AWAY FROM THEIRS..(OR THE BANKS IN THIS CASE..)??
Anyway...I love seeing these houses go down..
ONE MORE SHOUT OUT! THE GREED IS STILL GOING STRONG..THIS IS THE REALLY INCREDIBLE PART OT ME...THAT THE REAL ESTATE BROKERS AND AGENTS ARE STILL..ULTRA STUBBORNLY, HOLDING ON TO THE 40% INFLATED PRICE TAG OF REAL ESTATE NATIONWIDE..HERE IN MY TOWN..HOUSES THAT HAVE BEEN ON THE MARKET FOR..I SHIT YOU NOT...2 PLUS YEARS...AND ARE 100 THOUSAND OVERPRICED...HAVE NOT BEEN REDUCED AT ALL...NOT AT ALL..AND IT IS THE GREED OF THE AGENTS AND REAL ESTATE MARKET THAT REALLY DID THIS TO BEGIN WITH..THE WALKING THE PAPER SCAM OF THE "APPRAISAL"...STILL ONE OF THE BIGGEST SCAMS IN BUSINESS...WHERE ELSE CAN ANY IDIOT MAKE 30 GRAND IN 20 MINUTES? AND WITH OVERINFLATED VALUES AND ULTRA CHEAP MONEY..THIS IS WAHT REALLY HAPPENED..THE BLAME THEY ARE PUTTING ON THE "RISKY LOANS" IS BS...THIS IS THE REALESTATE MARKET AND THE APPRAISAL GAME..PERIOD...AND IT STILL IS..AMAZINGLY ENOUGH...
SO THE REAL QUESTION IS: HOW LONG WILL THIS HAVE TO GO ON BEFORE THE ARTIFICIAL 40% OVERPRICING OF PROPERTY FINALLY BE TOO IMPOSSIBLE FOR AGENTS...SORRY BUT TYPICALLY WOMEN WITH A LICENSE AND NO LIFE...BE FORCED TO SURRENDER THEIR GREED??????

This whole situation (buying way more then one can afford) was built on greed, and the prospect of unloading on some sucker before the bill was due. I have talked to lenders, and the premise for taking out these risky loans was this:

Get a 3 - 5 - or 7 year ARM, but before the adjustment comes where you really start Paying WHAT THE LOAN SHOULD COST YOU, do the following:

1 - refinance to a cheaper instrument, and while you are at it ~ HEY ~ take out some of the equity, since housing WILL CONTINUE TO RISE AT A 10 PERCENT CLIP A YEAR.

Or 2 - sell in two years, don't pay capital gains, and MOVE UP with that risen equity dividend you got, because ~~~ you got it, houses will continue to rise at a 10% clip year over year.

It was all based on a TOMORROW fantasy, on not actually paying for your lifestyle, but dumping it back for someone else to pay for.

Well, the bottom is falling out. The dream has become a nightmare, because both the laws of ballons and the laws of physics are infallible and continuous.

WHAT GOES UP, MUST COME DOWN.

What we are seeing is called.

KARMA

will the former Exxon exec. that left with a 400 million dollar bonus loose his house?

of course not, and eventually people like him will own most of everything and they will still be able to afford the $13 a gallon gas thats not far off.

there will be mega numbers of new street people in the usa, but there will not be any soup kitchens to feed them.

This has all been planned and the plan is working.

The mcmansions need to be stigmatized so that their owners look like fools.

I've been in my 768 sq. ft. home for over 20 years, and I've never been more grateful for it.

If I could have afforded a McMansion, I would have paid cash for a much more modest home. My little towhnouse, 1078 square feet, was paid off years ago. I did get the urge to "move up" some years back, and a real estate agent was trying to talk me into taking out a loan for the down payment and a loan for the mortgage. I ran, I did not walk, out of her office. What the hell are/were people thinking taking out huge loans they had to know they couldn't really afford? When it takes two incomes to make a mortgage payment you are in over your head.

Mcmansions , high HP cars, gas guzzlers, golf courses,and many other wasteful things should be taxed out of existence. Those taxes should be spent on building up more efficient transportation and subsidizing efficient things like elecric cars, small apartments, and public transportation.

matti, what a wonderful comment! You made me laugh with your logical argument that they must be OVERPAID IDIOTS! Of course, that is a reasonable possibility, what with nepotism, legacy college students (ie GW Bush), favoritism (ie Brownie) et al.

And no, I don't wish pain on anyone. But I would like to take back some of our money that WE worked to provide from those wealthy thieves who stole it and reinvest it in our country and people.

And I would love to elect politicians who would support us to do that.

kathyodat

AngstOfThePeople, I didn't say being poor or a minority guaranteed victimhood, I just said that predators targeted them. With greater success than better informed people. My youngest son went to a school in Wading River in Suffolk County on Long Island which was spending $18,000/child annually, courtesy of the Shoreham nuclear power plant. Six computers in each classroom in addition to 20 in the computer lab, no more than 18 children/class, art and music teachers and librarians and a ton of extracurricular activities, including baking cookies in class and cultivating miniponds on class windowsills. Up in Nassau County, Amityville, a very poor district, was spending $3000/child. When we moved to Eugene OR, the French class had 50 students, the science class had six textbooks, ten years old. The math department had no math majors teaching and they were clueless about how to teach the math course to the 7th graders. His teacher told me that. Oregon's measure 5 (courtesy of Bill Sizemore had trashed the school system. His English teacher was a former PE teacher who couldn't spell (cheif for example in 4" high letters on the wall). My point is it makes a huge difference in what kind of education people get. The No Child Left Behind Act is driving schools to encourage kids to drop out before getting tested so they won't drag down the scores and reduce the Federal aid to schools. This doesn't happen to well-to-do kids. They have an opportunity to learn to understand contracts. Not very many children of poor, single family homes manage to pull themselves up out of all the hardships they have to face to make it to college.

There is still tremendous wealth in this country but it is not being allocated for the public good, including our children. We know where it's going. That is my point.

I think you're skewing this issue a bit -AngstOfThePeople-.

If one has the financial wherewithal to recieve the kind of monster loan that "buying" one of these giant houses requires, then it follows that one should have some experience with money and investments and therefore should not be fooled by lenders.

At the very least people with that much money -even if its just from a high paying job, not investments or inheritence- should be able to afford, and be savy enough to employ a lawyer to review the Terms of the Loan.

The same should cleary not be expected from truly Working Class folks.

Where and for what reason whould they have picked up the kind of legal and economic knowledge that it would take to see through the thick cloud of B.S. that lenders have been producing for the last 5+ years?

Our public schools?

Ha. Ha. Ha.

Their day to day life experience working to survive paycheck to paycheck?

Doubtful.

---------------------------------------------------

So no, I don't think, and I doubt -BeForKids- thinks, this is necessarily "justice" for the McMansion "owners", but it is almost certainly just desserts.

And if not, if people who could afford these giant loans TRULY are just as ignorant of the law and finance as the Workers who have never had enough wealth to bother shaking this ignorance, then, Man, that's actually MUCH WORSE, isn't it?

That means that a significant portion of the Wealth of this land, and this Nation-State, has been witheld from the Majority, not by a strong and purposeful Management Class, but rather by isolated pockets of OVERPAID IDIOTS!

That idea pisses me off so much, I'd much rather think that these people were merely speculating or overconfident in the Bull Economy.

That I can excuse.

That doesn't force me to consider radical, decisive, possibly violent Action, in order to more fairly (and apparently no less wisely!) distribute the Wealth.

------------------------------------

Hell, maybe we should do it anyway, sans the violence.

Remember the Wobblies? Maybe we need them back!

One Big Union!

Only this time without the "industrial" part?

A people's Union of all the Workers/Farmers, Mothers/Fathers, Cooks/Crafters, Artists/Accountants, Lawyers/Layabouts, Profs./Students, and all the rest of the People!

We could run this sucker just as good as the Politicians and the Wealthy!

Look what they've done with the place! Just about run it into the ground!

Maybe we should give it a try.

Are they allowing people to write (GEN)(ERAL) sss(STR)ii(IKE!!!!) on this site yet?

--End of Rabble Rousing, promise--

-matti.

ggmurray: "Every time a new McMansion has cropped up on my road, I can't help thinking that in the end it will have to be divided up into apartments. Why is no one talking about this?"

I was thinking the same thing on the way into work this AM. these monster houses will just be cut up into tenaments like the brownstones in Harlem were.

But most of these, at least up here, are a loooong way from transit and even further from centers of work, so who would live there if all you could afford was a room in a tenament? probably no-one. most will just rot, some will be squatted by the unemployed neo-hobo drifters after GDII kicks in..

What these events foretell, is the collapse of the egoism consciousness.

All things we surround ourselves with that go beyond the sustaining of our health and well being, are the ego's attempt to make itself larger, and thus satisfied - that it is bigger, and can show its audience "look what I have, is it not BETTER than yours"?, and thus the ego "I" is superior.

In Eckhart Tolle's new book, A New Earth, he explains it this way;

"Millions are now ready to awaken because spiritual awakening is not an option anymore, but a necessity if humanity and the planet are to survive. Everything is speeding up – the madness, the collective egoism dysfunction, as well as the arising of the new consciousness, The Awakening.

We are running out of time. From the perspective of the ego, that's bad news and will give rise to fear. From a higher perspective, the running out of time is exactly what is needed for the new consciousness to come into this world."

"We" - humanity are addicted to satisfying the demands of the ego, and the events we are all commenting about on this site, Huffington, and other blogs, question the actions taking place on this planet on behalf of ego consciousness. To dissolve the influence of this inner voice of the mind, we must start as individuals to lift ourselves up.

The one unifying purpose of humanity is lost in its religions, which should be the guidepost to which WE should look for our true purpose.

Alas, the religions of the world have come under the servitude of the collective ego, and for the most part divide us rather than unite us.

The uniting force of self-realization, self discovery, self awakening is coming. It's based on the original teachings of Jesus, and Buddha, and Krishna - that man is a spiritual being having a human experience, and until he reunites with the creative force that sustains us, he is condemned to wander, seeking answers in pleasure, in monetary terms, in material THINGS and most delusional of all, in intoxicants.

An awakening power is starting to be perceived by those who are looking. Those who have seen what our culture offers as the "ANSWERS", i.e. more stuff, more, bigger, mine, my ownism - is a hollow and temporary satiation of ego's unending demand for relativism.

The ego won't go down without a fight. And economically, this paradigm must change, or we are doomed to consume ourselves into extinction.

Join the fight for self survival, it's up to us.

www.ananda.org

Every time a new McMansion has cropped up on my road, I can't help thinking that in the end it will have to be divided up into apartments. Why is no one talking about this?

Kathyodat - being poor or a minority does not automatically make one a victim - to imply that mcmansion owners are somehow necessarily immune from falling prey to irresponsible lending practices, is just missing the point.

Stupid adheres to no socio economic profiling guidelines.

My wife was appalled at the quality of building that goes on in the US, even these McMansions. These things are built to last a very short time. I keep wondering what will happen to the land they're built on when they are abandoned.

Don't forget that the bailout will come from those that live below their means. Their savings will bail out those that lived beyond their means. Your reward for saving will be the honor of paying off the bills of those that over-consumed their funds.

The sad part of this is that there are so many people in this country who really believe that they
"NEED" a 20,000 sq. ft house or a 500hp automobile. There are billions of people on this planet
who would love to have a 500 sq ft house with running water and electrical service. What these
people throw away in a week could feed a poor family for a month. There is just no limit to the
greed of these people. If there is a bailout for people who are losing their homes, it will probaly
start with those at the top.

(88,000) jobs wiped out ___ JUST last month. ___Do any believe that trend will suddenly cease?

That's 88,000 more who will NOT be purchasing automobiles, F-150s or SUVs, shopping at Home Depot or buying Chinese made junk at Wal-Mart, or buying appliances, tile, carpets etc. That is 88,000 more this year who won't be purchasing a home, or even keepng the one they have if it's mortaged. 88,000 more who may have lost health insurance and will be cashing in their 401s if they have them just to make their house or rent payments and buy food and necessities.

More and more business failures will continue with more and more jobs lost. Like a snow ball rolling down hill, picking up speed and gaining in volumn and mass. A mass of unemployed and the price of everything rising. Be prepared!!

The deck of cards is falling and there is no credible end in sight, it now requires $1.61 to purchase a Euro. A year ago, you could buy a Euro for $89 cents. Fuel and food have almost doubled in cost in just the past two years. There is no stopping that trend. Be prepared!!!

Lynda O April 7th, 2008 11:03 am

"The earth will not support six billion greedy souls-now or later."

Even less-so the nine billion promised for 2050 ... but sometime in between, there may be someone willing to buy those houses.

Any person who buys into the McMansion or as I call it, Starter Castle bit, and now has problems has it coming. No two people need that much space, and most of these were not sold to people with large families. They were sold to couples who had to have all that extra space. A cleaning woman cannot even clean the damn things in 8 hours. I know that to be a fact. I have 1040 sq. ft. and wonder what to do with all the extra space which is little used. Get real America.

I am reminded of how my grandmother, a survivor of the Depression, managed to live a virtualy debt free life. Her rules were as follows:

1. Never buy on credit. If she couldn't pay for it outright then she didn't need it. My grandparents house was a fixer upper purchased with cash from their savings.
2. Do not trust banks. She never held a bank account as long as I could remember. She paid cash for everything.
3. Do not borrow money, even from family. It will give the lender control over your affairs. Make do with what you have.
4. Secondhand clothes will cover you just as much as new ones will.

Friends and family scoffed at her for not being in with the times. We said she was clinging to a Depression mentality, yet she always came out of any economic downturn unscathed. She was never wealthy but she was satified with what she had.

Considering the whole house of cards structure akin to what was the situation in the Stock Market before the 1929 Crash was what was going on in the mortgage business, is it any surprise that the crassest of "Look at me" housing is now under the foreclosure hammer? Next up is the highest tier of the market.

No Spinoza, AngstOfThePeople does not have a good point. People who bought McMansions knew what they were doing. Brokers weren't lying to them about what they were signing. They were being greedy and gambling they would get away with it. I knew in 2005 that was the last hot year, but I read the financial pages and knew we had huge fundamental weaknesses in our economy that were unsustainable.

Lower income people were lied to and redlined into mortgages with punitive features, about which they weren't informed, even when they qualified for better mortgages. That's the real crime.

The problem with not helping these people is that when they lose their homes, their neighbors lose market value and the entire building industry is collapsing with plenty of collateral damage. Add to that the banking industry tightening credit because they are clueless about which of their assets are safe and the Fed printing money like a drunken sailor, lying about inflation by excluding our inescapable costs of food and energy which are skyrocketing, and we do have a perfect storm coming on us.

I don't see a single politician daring to face reality at this point.

kathyodat

We have a modest home in a middle-class neighborhood. We've lived here for 20 years. It's paid off. We owe nothing. Our cars are getting old. We don't have the fancy new TV sets or blackberries and new technology. My computer needs to be replaced. But, we don't owe any money to anyone.

The problem is that the neighborhood has changed. We are now getting abandomed houses and people who no longer bother taking care of their property. Property values have gone down and the crime rate has gone up.

Even those of us who have been careful with money are getting hit. Regardless of who is to blame, we're all going to be hurt.

Pendejos egoistas.

When the consumer realizes that 'living large' is nothing more than viewing our own worth by other peoples standards, and all the worry and concern over paying for items that we can't afford is not good for our health, only then will people see that 'living large' and immediate gratification does not equal happiness.

If you have debt, other then a reasonable mortage and a car payment you are paying down, and you can't pay off the discretionary spending you do on your credit card and your cost of living bills (phone, energy, insurance, cable-ugghh!, etc) then you are eating your seed corn. The season for planting is now, and if your seed is gone, the harvest next fall will see barren ground, and a deadly winter will follow.

I'm not going to shed any tears over anyone who is losing one of these monstrosities. I'll take it a step further and say that I don't think that anyone should receive a mortgage deduction on their taxes for any home that is valued over 60% of the median home price in their region. The tax breaks ought to be there to make home ownership a reality, not a means for the wannabes to be rewarded.

When you borrow money, you take a gamble that future good luck will allow you to pay it off. Sometimes you lose. If you roll the dice, you take your chances. Its your choice and your responsibility. Thats the way it works in a free society. If you make money, nobody takes it away, so why should we pay your bill when things go the other way.

AngstOfThePeople raises a good point. We clearly have to bring predatory lenders to heel, but we also have to work on the "gotta have it" mentality that grips all socioeconomic classes. Greed and irresponsibility are present in all the actors in this crisis.

Up until 1929, it was illegal to charge a
person more than six percent interest on a
loan. The bankers ignored that law in 1929;
the Congress ignored the fact the bankers were ignoring the law; and as far as I can
find out, the law has never been enforced
again. It took me months to close down my
Exxon-Mobile card on the grounds I thought it
was unpatriotic to charge 23 percent interest
on outstanding balances, compounded, while
American youth bled for Iraqi oil. The balance was zero and I finally had to threaten legal action to get the company
to close the account. That is
why the oil companies are so wealthy today
and when American youth finally discover
what high interest rates mean, there will be
a monetary revolution, and the bankers and
compliant leaders might be forced to give
America back (to paraphrase an old populist).
Most of our current monetary problems will
then take care of themselves and some modest
equilibrium can be restored under the rule
of law; and not usurious loansharking. The
same principles hold true for the housing
business, etc. I hold the state legislatures
accountable for not educating our youth as
to what is really going on.

Back in 79' I went to our local owned bank and asked to borrow $4,000 to buy an 80 Toyota PU.

I had $4,000 in my savings account there I wanted to apply towards the truck so all I need to borrow was the other half.

I was told "I didn't have any credit" and to get a credit card and buy some clothes or something and pay it off.

I said I needed a truck! They are telling me to buy stuff I don't need! My bank is telling me to what to buy!

I walked over and emptied my account and went to the oil field and made over $4,000 in 2 months.

I will never borrow money from an institution; I promised myself that!

Check out this terrific cartoon - from 9/20/07

http://www.cagle.com/politicalcartoons/pccartoons/archives/wasserman.asp?Action=GetImage

sooooooooo when a poor person gets an adjustable rate mortgage that rises too high to be afforded, he or she is a victim. when someone of some means gets one, its justice?

funny that.

And, once again, the American people do nothing...until they are foreclosed upon. We have all the sense of community of feral cats, clawing and biting at one another. All the while, the really big cats, the fat cats, laugh at us.

These can take years to sell, as they must compete with brand-new developments still coming online.

Desperate to sell these homes will be liquidated causing the value or everybody else's home value to drop!

Congress is still looking the other way. Listen to the ads on AM talk radio. Fix your credit, trust us to get you out of debt in months. Invest in Real Estate and you will never have to work again! In the get rich quick schemes, you have to think; if it's too good to be true, it probably isn't!

So the higher income neighborhoods have been hit? Now you'll see some action on the foreclosures issue!

The underlying causes for foreclosure have existed long before the subprime chernobyl, and will continue long after this bailout. The overwhelming majority of US workers who live from paycheck to paycheck are not immune from financial hardship. Foreclosure doesn't discriminate.

Are you at risk? www.spoch.org

Too bad for this homeowners, I hope they learn their lesson: living beyond one's means is stupid. And yes, it is time to downsize for everybody.

When my husband and I bought (for cash) a 554-sq ft home in the SF Bay Area in late 2002, our friends said we were crazy to settle into such a teeny space. Well, here we are a few years later: sitting debt-free and watching our friends clutch at their third job with blood-drenched knuckles trying to maintain a bigger roof over their heads.

We Will Downsize (we being the NorthAmericans) or we will be eating soup from a campfire under a bridge to paraphrase Springsteen. The earth will not support six billion greedy souls-now or later.