Are the RICH victims here as well?

Question

http://www.miamiherald.com/business/story/306413.html


Reading this story and so many others, as well as about the huge loss by almost every bank in the United States, and the closing down even of some banks, do you feel this was completely avoidable and totally unnecessary; the voracious need for power and money by so many people, even the middle class and poor who went about negligently applying for loans with loan sharks, and going along with hairbrained ideas posted by supposed "creative" mortagage lenders?

Better yet, will we see an end to this disaster with mortgages and rapidly depreciating real estate market?

Answer 1

Yes, this was totally avoidable. However there is plenty of blame to go around. I can't believe all the sob stories from people about how they can't afford their adjustable rate mortgages now.

This is only THE MOST IMPORTANT FINANCIAL DECISION YOU'LL EVER MAKE. Spend a few hours doing basic research to make sure you understand what you are doing and don't get taken advantage of.

I bought my first home in 2004. I was offered garbage ARMs too. I turned them down. I remember quite clearly telling my mortgage broker that "If I can't afford a fixed rate loan now when mortgage rates are at historic lows, how the heck will I be able to afford a higher adjustable rate a couple of years from now."

People will always be out there to scam stupid people. It's our duty to be informed when making important decisions. I'm not forgiving all the people in the industry who took advantage of the situation. But they would have gotten nowhere if more buyers were informed after a few measily hours of research.

Answer 2

Some of us made out like bandits though. Like me! I was able to take advantage of the real estate bubble, pay off all my debt, buy a new car and have a nice safe nest egg in my bank account. I knew a good 9 months before that bubble was about to burst. Greed put those people in those situations. Good financial sense made alot of us money. We got out of our houses and rented.

Answer 3

Yes, you will see an end to it. The financial markets need to stabilize by repricing these CDOs and the real estate market needs to stabilize as the "subprime" ARMs reset and foreclosures decline. It will probably take until 2009.