MovieChat Forums > Inside Job (2010) Discussion > Home owners are NOT to blame for the col...

Home owners are NOT to blame for the collapse

posted 14 years ago by Boricanator
25 replies | jump to latest

I can´t believe that so many people are placing blame on the homeowners as if they had any responsibility about this.

As the documentary correctly points out. For 40 years after The Great Depression, were no global crisis like this one. With all the Government regulation that was placed, banks made responsible loans to people that could afford them. If they didn´t, the loans were not given. Pure and simple.

After deregulation, the financial system began this complex loan system that many of them did not quite understand and started granting loans to people they knew could not afford.

But how could the average joe know? For decades, we always thought that banks would not give loans to people that could not afford it. The banks, accountants and economic advisers are the ones who have the "know-how" about it, not the average joe.

The documentary did not blame homeowners because:

1. They did not benefit from this like the people in Wallstreet

2. They were duped by those with knowledge.

Pure and simple.

[–] xoomis 14 years ago

I agree. The banks and financial institutions must practice prudent underwriting in order to prevent this. They did not. Therefore, it's not the homeowners faults.

This is the fault of wall street pure and simple. It's a freaking shame there aren't really any prosecutions as a result of this. Some of the players involved flat out committed crimes and should be punished.

[–] Misanthwopical_Bweed 14 years ago

agreed

the financial market is complicated for a reason

so average people dont understand it (including me)

that is why we need watchdogs

and as the crisis proved they cant be their own watchdog
blaming the homeowners is very myopic

"The US was founded by a group of slaveowners who told us all men are created equal."

[–] LLOwens 14 years ago

Like some of us have been saying for the umpteenth time--securities laws are designed to protect investors--not homeowners and workers. So guess who will get shafted and stuck with the short end of the stick when bubbles burst?

[–] Boricanator 14 years ago

Indeed. They are all victims.

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[–] jokeco68 14 years ago

One of the most fascinating outcomes of the financial meltdown of '08 was the opinion by some media commentator's that the people at the bottom of the food chain were to blame because they shouldn't have taken out mortgages in the first place. It didn't really gain a lot of traction as an issue but I thought at the time 'who starts this crap anyways?'. The banks and their complete deregulation are solely to blame, pure and simple. The whole concept of derivative trading being completely without regulation? These garbage mortgages being bundled up and given a AAA rating? Investment banks allowed to bet against stocks they are selling to their clients? It seems the whole key to Wall Street's method of maintaining control of America is to distract the average joe, blame the crisis on people who have good pensions, illegal immigrants, universal medicare and people that shouldn't have taken out mortgages in the first place. Meanwhile, investment bankers are losing unimaginable amounts of money, amounts so huge that average people like myself can't even conceive or ever be able to pay back and they skim off hundreds of millions so they can have several posh homes and a private jet. They are commiting unthinkable crimes against humanity and getting away with it in spades.

Everyone gets everything he wants.

[–] sd45-1 14 years ago

"What sensible person would take on a mortgage where the monthly payment was more than 90% of their income?"

Anyone who looks at trends and sees that the home will double in value in 5 years. Thats who. We call that taking advantage of a financial windfall, which is a subset of capitalism.

Seriously, these homeowners are no worse than a guy who opens a business because trends and numbers show it *might* make a profit. And if it doesn't make a profit, oh well, someone tried. Just walk away from the property.

They are all operating on the same principle. Now I ask you, what makes the homeowner more evil, more irresponsible, than the owner of the failed business?

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[–] Citizenright1 14 years ago

The individual homeowner is only to blame, if there is blame, for his own circumstance.

[–] jokeco68 14 years ago

I take it that is based on your opinion? 'Cuz that's the only basis I see here for an argument and it's pretty weak.

Everyone gets everything he wants.

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[–] Citizenright1 14 years ago

Still waiting to hear who is putting the blame on homeowners.

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[–] Citizenright1 14 years ago

"Well, except to reduce the regulations so much (i.e. republicans) so the world's economic crash is the result. "

This is not accurate.

The scheme to lower lending standards, which began this debacle, began with Clinton.

The unregulated over the counter market in financial derivatives were recognized as a problem in the 90s and when the head of the CFTC wanted to put some regulations in place she was viciously attacked by Greenspan, Robert Rubin, Larry Summers and Clinton's head of the SEC. Also various Democrats in congress and Republican Phil Graham.

During the Bush admin nothing was done to stop this train speeding down the tracks, but Bush and the Republicans didn't start it. Clinton and the Democrats did.

When some Republicans wanted an investigation of Fannie Mae, which was a major cause of the debacle, they were shouted down and called racists by the idiot Maxine Waters-D, the corrupt Gregory Meeks-D, and Barney Frank-D who got his boyfriend a job at Fannie and whose mother got 2 charitable contributions from Fannie.

Christopher Dodd-D got a sweetheart loan from Countrywide which worked almost exclusively with Fannie Mae.

As for the homeowners who borrowed money they couldn't afford to repay; their personal circumstances are their responsibility. If they didn't understand the terms or couldn't repay the loan and then go hurt, that is their responsibility.

It wasn't "de-regulation" that led to the debacle. It was no regulation.

[–] metaphysicalclub 14 years ago

Yes they are. People have to learn to be responsible for their actions. Say to themselves, "I made the decision, I signed my name I am responsible, and now how can I change future outcomes by changing my future actions?"

I bought a home in the midst of this meltdown. I went to a broker initially who said I qualified for a $300,000 house but I also I looked at my budget and decided I could not afford that. I then went to my city's "First time Home Owner" class: http://www2.cambridgema.gov/cdd/hsg/own/hsg_own.html for the City of Cambridge, MA and I did a full budget and I decided what I could afford based on my income at that time which was a $100,000 property. I ignored what others said, I pulled out a calculator and I did the math. I bought a condo I could afford and I am still easily making payments on my home, paying my home owner dues on time, and last year paid an assessment that improved our co-owned property. My home only lost about $8,000 in value which is acceptable for me because my mortgage is less than any rent I would be paying in my city.

If you walked away from a mortgage you were responsible for, you did not do your math. There was plenty of local help for anyone purchasing a home at the height of the banking meltdown but people decided that they wanted to live like royalty and blame others for their own decisions.

Calculators at a drugstore are about $10.
Homeowner classes were free.

~metaphysical

"Like everything metaphysical the harmony between thought and reality is to be found in the grammar of the language." ~ Ludwig Wittgenstein

[–] sd45-1 14 years ago

I don't quite agree with that.

I cannot hold homeowners to a different ethical standard than I would hold a business owner to. If a business owner can easily abandon their obligation to a community as a provider of jobs and shut down and walk away from unprofitable manufacturing facilities, so should a homeowner be equally able to walk away from upside-down property (an equal money-losing situation) without being branded by your scarlet letter as not being "responsible to their obligations". If walking away from promises and contract signatures is deemed acceptable for one element in this society, the elite business owner class, then it should be acceptable for all. Home buyers should not be held to a different, tighter standard, just because they are less affluent.

You really do need to stop cheerleading for the rich boys who are waging class war upon the middle class and the poor. Show us some equal outrage over someone's "lack of responsibilities to obligations" when factories move offshore seeking cheap labor.

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[–] dosware 13 years ago

I'm not trying to place blame anywhere.. but I know I was very hungry for a home for my family back in 2005. And I could have easily got a mortgage for a nice house. But ultimately, I did the math, evaluated the potential risks. I knew I was out of my market. So I rented a house- and came out way ahead. I ain't no genius. Due diligence saved my dumb butt.