One million four hundred thousand home foreclosures last year. Up forty six percent from 2005? Is this people.
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Answer:
It is because of a few factors
* Our schools failing to teach people how financing works and the consequences of overextending
* It is finance companies, banks, investors and property developers being unethical by allowing people to commit themselves to contracts which the bank, etc. knows that the customers cannot fulfill.
* It is part of the "booming economy" which has come about as a result of the Bush administration's policies of granting carte blanche to unscrupulous businesses subsidized with inordinate tax cuts (the economy is booming for the wealthy, at least, while poor and middle class Americans loose their homes in record numbers).
You are right, it is scary.
A lot of it is investments gone bad. I'm having a foreclosure, but it is on an investment house, not my permanent address. I know of at least 6 other people in the same situation. The real estate market was booming, now it crashed. I know that isn't all of the foreclosures, but I'm sure it is a lot.
Well the other 300 million must be doing something right. But both play a part.
Both play into it. I'm certainly not ready to pat the subprime lenders on the head and send them happily on their way, but the ultimate blame MUST be placed on the shoulders of those who borrowed money they could not repay. WAY too many Americans have a tendency to have champagne tastes on a beer budget.
It is The Failures version of the "ownership society". With Bush, AKA The Failure it has become the "foreclosure society".
Census of ALL Americans. ALL Americans do not own homes, not even close! LOL!
the business practices in the loan market have been rediculous... and people, granted aren't being the smartest with their decisions...
it's clearly a combination of the two... and now the rubber is hitting the road for those that made billions when the market was booming... time to cut and run with the profits to Mexico!
and I didn't know every American owned a house?
Everyone was building, buying homes they couldn't afford. People were leveraging themseves to the max. The American attitude was to have a bigger, better home than ny neighbor at any cost. The day of reckoning has arrived.
No pity from me, Learn to live within your means.
It shows there a allot of people who don't know how to manage $$$
I think its both but mostly irresponsibility and living beyond means.
In America its all about Image and its all bullshit, foreclosure on a home today sell it tomorrow, some of these people have been paying years and then the unforeseen happens. They build starter houses about 1500 square feet larger than in the 80's and theres a reason for that, when the % is down the price is high when the % is high the price is low.
Yes unethical business practices play a part, hell thats how they get rich, they could care less it you can pay for it, heck they would like you to live in it 5 years and loose it so they can sell it again, they made there money. Its the same with cars, all bullshit
yes and yes
it' s part of the feel good generation
if it feels good do it
got lousy credit ,,see me you can buy this home
you may be out next year but who cares
my parents had to make a down payment on a home
they had to pay 50% down,,that was years back,, but believe me you did not want to loose one with a down such as this
too many people getting the American dream with out earning it,,no work all play
now it is catching up
Depends on the interest rates and the type of mortage they acquired.
Let's face reality here. If you purchased above your means and honestly thought that the interest rates would never go up. DUH!
Trying to keep up with the jones and the false sense that I can make a payment of over $1200 a month because I getting a much bigger house. They did not realize that with that bigger house meant other bills would be much bigger.
Not the mention we have a horrible economy.
Some folks think it's those popular variable-rate loans that are helping drive the surge in foreclosures around the country, allowing buyers to purchase more expensive houses than they could otherwise afford.
Some speculate that lost jobs were the main culprits. Realtors say the hardest-hit areas appear to be houses in lower-income urban neighborhoods.
I'm sure there's no one "easy" answer...
Obviously, we are all responsible in this life for our decisions. Having said that, I must add that many borrowers were led down a rosy garden path by unscrulous lending practices. And the unscrupulous lenders were led down a rosy garden path by the Federal Reserve. Let me explain!
After the dot com stock bust, the FED dropped the short term interest rate, in a series of moves, to a low of just 1%. Investors were very apprehensive about the stock market, but the low interest rates and the opportunity for leverage drove millions of investors into the housing market. Some investors made a timely exit and reaped spectacular profits. Many investors got stuck with their hand in the cookie jar, and they became part of the housing bubble.
The housing boom lasted for over 4 years pushing up the prices of real estate. Lenders flush with cheap money flooded the market with loan products that were almost too good to be true. 100% loans with interest only payments. Loans made without verification of income, without documentation of employment, with no credit checks and with little or no down payments were the rule and not the exception.
And then, the FED turned off the spigot and increased the short term rates in a series of moves to over 5%. The real estate market died and prices began to fall. Investors and home owners lured by the artificially low rates are finding out that they have been priced out of their homes. The result is a foreclosure boom which is in its initial stages. We can expect more of the same in the coming years.
Americans caught up in the dilemma should thank Alan Greenspan and the FED for creating the environment which lenders capitalized on at the expense of millions of home buyers. As always, caveat emptor. Let the buyer beware!
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