Because of the boom in the house market awhile ago why didnt people see a down trend coming?
People were buying homes they might not be able to afford in the future at a higher rate so whats the big deal???
Maybe some people weren’t clear about the dramatic fluctuations that would occur in the rate. I think the lenders have a responsibility here as well. Also, it’s human nature to be optimistic about the future.
February 24th, 2010 at 2:48 am
usually the prices of houses goes up, so they thought they could sell at a higher price and then buy a house they could afford with a good down payment at that time.
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February 24th, 2010 at 3:01 am
Maybe some people weren’t clear about the dramatic fluctuations that would occur in the rate. I think the lenders have a responsibility here as well. Also, it’s human nature to be optimistic about the future.
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February 24th, 2010 at 3:29 am
It’s not the people’s total fault.
Sure they were too foolish to check out what variable rate zero down meant.
But the lending company’s over extended as well everybody looking for the easy buck.
And easy property owing.
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February 24th, 2010 at 4:17 am
Well, I saw it and I’m no expert. I’m just a person who’s been around a while.
Several years ago I met a woman who had just bought a house for 600K, as an investment, intending to rent it out to pay the mortgage. When she told me, I blurted out, "It’s a really bad time to be buying…..Never mind, I’m no expert, and anyway you already did it." Now a lot of people are in really difficult straits.
But then, a few years ago I gave a couple of relatives some money for the down payment on a house. They don’t earn a lot of money. So when I heard of all the foreclosures, I asked them whether they were having any trouble with the mortgage. The wife told me "No, if that were a problem I would be working instead of staying home with the kids." They used their common sense to buy a house they could afford.
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February 24th, 2010 at 5:01 am
My two second take on this one…. Greed! People were greedy for cheap and easy credit, and the lenders were greedy for the fast bucks.
On the other hand, this is only a cycle. It’s not the first and won’t be the last.
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