On Fri, 1 Aug 2008 16:40:20 -0400, "Nancy Young" >
wrote:

>Goomba wrote:
>> sf wrote:
>>
>>>> What *exactly* did Bush have to do with mortgages again? The way I
>>>> see it half the people having mortgage problems were people who
>>>> overbought assuming they were going to make a killing when they
>>>> flipped the house. Housing prices readjusted (look at California
>>>> who led that trend) in many areas because they were just insanely
>>>> overpriced. There were also certainly mortgage lenders who got
>>>> sloppy and allowed unqualified people buy more home they couldn't
>>>> afford which I can find fault with. Yet somehow I don't see how
>>>> Bush (or Clinton before) as being responsible?
>>>
>>> They did nothing to stop predatory lending practices even though it
>>> was obviously a train wreck waiting to happen.
>>>
>> And did these predatory practices start in 2000, or perhaps, before?
>> And how much responsibility did the borrowers hold here? Were they all
>> helpless, clueless victims?
>
>How did it come to this, that people had NO IDEA they couldn't
>afford a house 10 times their income? That it was just SO
>CONFUSING, all those big words like balloon payment. What,
>the interest rate is going to go up?
>
>I guess we do need paternalist institutions telling us what to do
>because it's just too much to expect us to figure out these things
>on our own.
>

Paternalism has nothing to do with it. Sound business practice does.
They needed to meet the same logical standards we met when we bought
our first homes 30+ years ago. We put no less than 20% down and made
payments that were no more than 25% of our income. There was no
choice, that's what we did. Our world of financing was a lot less
complicated.

However, if those slimy lending practices didn't exist there would
have been an economic downturn and subsequent inflationary period long
before this. Those practices fueled the new housing boom, which is
now a big bust.


--
I never worry about diets. The only carrots that interest me are the number of carats in a diamond.

Mae West