From: Banty 
Newsgroups: misc.consumers.house
Subject: Re: Blaming the victim in foreclosure epidemic
Date: 6 Sep 2007 08:30:53 -0700
Bytes: 3355

In article , Jonathan Kamens says...
>
>Howard  Lovy  writes:
>>Are reporters so out of touch with real-life people that they are
>>ready to simply accept the word of their local real-estate adverti...
>>I mean, agents that higher mortgage rates from the beginning would
>>have prevented this epidemic of foreclosures? When you're out of work,
>>it matters little whether your mortgage rate goes up a little.
>
>Except most of the people losing their homes aren't being foreclosed
>on because they're suddenly out of work, they're being foreclosed on
>because they were sold mortgages that they wouldn't be able to afford
>when the payments shot up.
>
>Furthermore, even before the payments shot up, they were so high that
>the debtors were forced to live hand-to-mouth and were unable to save
>up any money for a rainy day.  Guidelines for how much of a family's
>income should be taken up by the mortgage were flouted by the subprime
>lenders.
>
>Mind you, the debtors in these cases do bear a great deal of
>responsibility.  They should have understood what they were getting
>into, they should have made contingency plans, and they shouldn't have
>let themselves get in over their heads.  There are simply too many of
>them for them all to legitimately claim that they couldn't possibly
>foresee what was going to happen.
>
>The borrowers screwed up.  The predatory lenders screwed up.  They're
>both at fault, both to blame, and both suffering as a result.
>
>On a related note, there are those in Congress who want to pass a law
>allowing subprime lenders to forgive mortgage debt without the borrower
>incurring a tax liability.  I am strongly opposed to this law, for
>reasons I've outlined in my blog at
>.
>

I think a lot of several things were going on, given the climate.  The problem
will be separating the folks who were either knowingly riding the system
(speculators, flippers, etc.), those who were just stupidly playing at the the
edge of a cliff (knowing they couldn't currently afford the increases or the
balloon payment, but were banking on an inheritance or settlement with selling
the house as the last resort plan), and those who were truly sold a bad mortgage
plan.

It doesn't make sense to say that the people now in trouble were all innocent
dupes, not that they were all foolishly playing their odds.  But there *are* a
lot of folks laying in the bed they made.

Banty