Home owners are NOT to blame for the collapse

Many share your view because the media insists on blaming the victims instead of following the money trail to fully comprehend who profiteered from the financial meltdown of 2008--which was not limited to predatory lenders who did business in the U.S. in efforts to boost their bottom-lines. You see--this problem is a systemic one that is not limited to America but includes all countries who comprise the European Union--many of whom are now faced with the exact same scenario that plagued Americans prior to the housing market meltdown. In the past few years we have witnessed an unprecedented world-wide economic bailout in the form of global capital--which some say amounts to a mind-blowing $22-plus trillion--which has directly led to private banks operating in countries all over the globe garnering record profits while causing a gargantuan buildup of government debt which has in turn led to massive cuts in entitlement programs and public sector jobs. So when some argue that Wall Street was bailed out instead of Main Street--this is truly the case since public funded bailouts were received by private banks as payments on past loans.

The documentary Inside Job made it clear that the problem was a systemic one--and even if some of the blame could be shouldered by Americans who lived beyond their means--the global financial system is in great need of sweeping reform. For example it spoke of how America's big banks have become so large that the failure of one of these financial institutions could bring down the entire global financial system. More recently in Europe--some have voiced their concern that banks operating in countries such as Greece, Portugal and Ireland were not bailed out--that this too would have caused a domino effect leading to the collapse of the financial system. In response to this, some have suggested the need to break up the eurozone in an orderly fashion to prevent this sort of thing from threatening the stability of the global financial system. Likewise, the same could be said about breaking up America's largest banks--for would it be logical to continue to allow banks to have monopoly power--subjecting the rest of us to their every whim?

To blame homeowners for the collapse would be akin to blaming hesitant home buyers for the depressed housing market. A few months ago the rate on a 30-year home loan dropped to a record low of 3.94 percent--while the rate on a 15-year fixed mortgage plummeted to a record low of 3.26 percent. But what good are record low mortgage rates when most middle-class Americans are living from pay check to paycheck--when the average net worth of Americans continues to plummet, unemployment numbers remain high, while credit card debt is up 150 percent compared to the same time last year. Most first-time home buyers are priced out of the market if they are required to put 20 percent down--especially if these buyers fall in the category of a 25-35-year-old with an average net worth of under $10,000.

Almost half of the U.S. population (146.4 million) is now either living in poverty or could be classified as low-income. 1 in 6.6 Americans receive food stamps. And if the GOP has their way in cutting entitlement spending--the number of poor could increase more rapidly over the next decade. And pain is especially evident in U.S. cities with a high cost of living such as Honolulu, Hawaii--which is currently the least affordable city for renters in the entire nation. Case in point: A meager 8 percent of middle-class jobs pay well enough to afford a two-bedroom apartment in Honolulu. So how do the majority of middle-class residents survive in Hawai'i'? What is becoming increasingly common here in the islands is an increase in homelessness, to have multiple generations of families living under the same roof, or homeowners who rent out a bedroom to help pay the mortgage. In short--when housing prices severely outpace wages--usually the bursting of such a bubble is soon to take place. However, in a place like Hawai'i--where demand is always great from domestic and overseas buyers--and when there is always a shortage of supply--prices don't come down much--even during a major recession.

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You work and get paid 20.000$/year, how the *beep* did you think owning a multi-million dollar house is going to be a good idea?

And of course, never blame yourself. It's not your fault you dind't know that there is no way to pay 5000/month... I mean, its not like you are educated human being or have the smallest sense of conception.

Most of the cases, if all, were not as obvious as buying a multi-million dollar house on a 20,000 salary. It was much more subtle. You also had the notion that houses would naturally increase in prices. If you couldn't pay it, you could sell it, eliminate the debt and even make some money in the process. Unfortunately, that's not how it went down.

Besides, as the documentary points out, many homeowners where told they would pay a certain amount each month and ended up paying twice as that much.

They were duped. That's all there was to it.

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Not trying to defend bankers, regulators, or any of those groups, but the homeowners have a responsibility to not take on more debt than they can afford. When I bought my condo 12 years ago, I qualified for a larger loan than I actually took, because I wanted to live within my means. After I bought it, i decided I didn't want to spend the next 30 years paying the mortgage, so I worked two jobs, cut my spending, and paid it off in about 5 and a half years. I'm not living on easy street, but at least I own my home, with no mortgage. I also have a college degree, no student loans, because I went to school part-time, paying as I went, not taking on any debt.




"My girlfriend sucked 37 d*cks!"
"In a row?"

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