Extreme Makeover House Faces Foreclosure.......

by Mary 25 Replies latest social current

• 

  SixofNine

  I have no reason to believe the family is irresponsible, w/o further information. I am pretty sure that they didn't ask for a ridiculous house, even if they got one.

  Now, the bank who gave them a 450K loan....

  These folks may have taken the leverage given them, and set themselves up to never be poor again, for all I know. Or, they may have squandered it all on trips to Vegas. I just don't have enough information to know.

  This is exactly why good government is important. The "free market" couldn't be trusted to loan responsibly, and, smart or dumb, nefarious or benevolent, these folks couldn't be trusted not to take a loan that the "free market" offered (probably even pushed on) them.
• 

  beksbks

  Chickpea, I was thinking along the same lines. Construction business. I would have to assume that is what they knew. But in the last three years the economy (good lord, housing) has gone to heck.

  We are in the process of buying a house right now. I got a much better understanding of how people got into this foreclosure situation after talking to our mortgage dude.

  I was thinking about what Layla was saying as far as the poor learning how to make and save money. I used to work at a bank in a very poor part of San Francisco. Most of my customers were on some kind of assistance or Social Security. It broke my heart that they would come in and cash those checks and then buy several money orders at 5.00 each to pay all their bills. A checking account would have cost them about 6 bucks a month.

  I had a class in high school, an elective, that had us do a mock checking account, look for a job in the newspaper, rent an apartment, pay bills, cook, etc. Classes like that should be required. How are those folks like my customers going to teach their children to do any different?
• 

  BurnTheShips

  This is exactly why good government is important. The "free market" couldn't be trusted to loan responsibly, and, smart or dumb, nefarious or benevolent, these folks couldn't be trusted not to take a loan that the "free market" offered (probably even pushed on) them.

  Indeed. The lenders lended irresponsibly, they lost their shirts. The borrowers borrowed irresponsibly, they lost their collateral. Everybody paid the price for being stupid. Had good decisions been made, everyone would have been rewarded. The way it is supposed to work. But government interference distorts good decision making by clouding economic reality and rewarding unproductive activity. All this catches up in the end. The books must balance.

  The fact of the matter is that the housing bubble was largely triggered by excessive government interference in the markets. The Federal Reserve increased the money supply at a record pace earlier this decade. Credit expansion distorts the pattern of spending and capital investment in an economic system. This in turn leads to the large scale loss of capital and sets the stage for a subsequent credit contraction along with the attendant effects in the larger economy, which is precisely what this foreclosure is the likely result of. With a glut of money with nowhere to go, credit standards slackened, the cost of money (interest rates) became artificially low, and loans were made that should not have been. Government intervention in markets distorts economic decision making, and is what leads to the imbalances that we see here. In this case, good government means less government.

  BTS
• 

  beksbks

  Meanwhile in other news, Exxon Mobile made the largest profits of any American company EVER. This was even after they paid up 290 Mil on some Valdez issues.

  Burn we've been heading down your road for 40 years now, and where has it gotten us? The trickle down theory is bull crap.
• 

  BurnTheShips

  Meanwhile in other news, Exxon Mobile made the largest profits of any American company EVER. This was even after they paid up 290 Mil on some Valdez issues.

  What does Exxon's profits have to do with my post? I could argue that the run up in the price of oil is partly due to the policies I derided above and I would be right!

  Burn we've been heading down your road for 40 years now, and where has it gotten us? The trickle down theory is bull crap.

  What an ignoramus! What in my post above has anything to do with "trickle-down" supply side economics? It is a post about monetary policy! The problem with most Democrats is that they are economically illiterate.

  BTS
• 

  beksbks

  F*ck you Burn! You simplistic self centered twit. Your copy and paste paragraph is nothing.

  You seem to have a real Cuba hangup. All government "interference" in this country is not bad.
• 

  BurnTheShips

  F*ck you Burn! You simplistic self centered twit. Your copy and paste paragraph is nothing.

  LOL. The ignoramus lashes out.

  BTS
• 

  beksbks

  How sweet. You must be a wonderful father.
• 

  BurnTheShips

  How sweet. You must be a wonderful father.

  Rather than bring up my fatherhood, learn something, economic ignorance is curable: http://www.youtube.com/watch?v=iYZM58dulPE BTS
• 

  moshe

  I wonder how a person could lose almost a half million dollars like that- you would think after he lost $100,000 he would have realized he needed to find a new business.