Edwin Pawlowski > wrote:

>"Steve Pope" > wrote in message

>>>AND shame on people who borrow more than they can pay reasonable afford
>>>monthly.

>> That's going a little far. In most lines of work, you cannot
>> predict your income from year to year. Maybe some have ultra
>> secure jobs, say in the public sector, but that is a small
>> fraction of people in general. The credit risk of an individual
>> is not an exact calculation, it is just a range of probability.
>> Buyers and lenders both take a calculated risk.

>But we're not talking about people that have a job loss or other radical
>unforeseen change in income. For the most part, these are people that just
>did not think ahead to when the teaser rate went to a real rate in three or
>five years. Their plan was to grab as much house now as they could afford
>and worry about how to pay when the time comes.

Well, okay, then the statement above "SHAME on people..." could
be a little less sweeping.

Let's say your business is running a restaurant. Your odds of
failure are high. You truly don't know your income over the next
five years. Should you not buy a house at all? That's
too much conservatism IMO.

Steve