By Adam Smith

Mar 15, 2008 7:51 AM | Link to this

This problem is like looking close up at an elephant and describing what you see to a blind man: you don't get the whole picture. It's now mid March and the fundamentals are worse than when this article was published and the scope continues to spread: the dollar pushes to new lows daily, the Fed bailed out Bear Stearns and the list goes on. If an all out depression is not on the horizon then one doozy of a recession is a certainty.

By Rick B.

Mar 6, 2008 1:09 PM | Link to this

Actually only about 1% of homeowners in America are going through foreclosure. About 95% of homeowners have accrued more equity, therefore it is only a small % of homeowners who are "losing" homes. Read the latest Figures from the Colorado Report. And banks aren't the bad guys. They bought the loans, but didn't originate them. The thousands of mortgage companies who have now closed their doors are the originators. I've been in banking since 1981 and have watched all the carziness. The loans which banks originated, and have kept to service, are reasonable loans. The politicans and Federal Reserve needs to work in the trenches and develop an understanding of the home financing industry. Banks are going to take a huge lick on construction loan foreclosures, but those loans are between the banks and home builders, not home owwners. Home builders and the banks who handed out cash like cookies, both should take big baths, and they are going to. But banks, by and large, didn't originate the "sub-prime" loans, mortgage companies did and packaged them and sold them to competing buyers. A few banks like Citi, Chase, Wells Fargo, Ban kf A, Wachovia, did purchase "sub-prime" loans for the intent of profit, and now they are being kicked hard, as well they should be. But the "sub-prime" loan originators, mortgage companies, originated probably 95% of the "alt-A" and "sub-prime" loans. Check the figures.

By Dee Dee

Mar 3, 2008 12:27 AM | Link to this

Once the foreclosures snowball, prices may go way, way, down. About 18 months ago, this problem was just a blip. When there are more foreclosures entering the market than new listings, then it is everyones problem. Bush must of found Bernackie the same place he found the old FEMA guy. I think they need to get a little more aggressive on this problem. When people are afraid to buy a home because they fear the value of it will drop 10% in a year, then it is too late. I think the banks and the Bush adm should of thought this one out a little better.

By mike

Mar 1, 2008 4:57 PM | Link to this

In regards to Mr. Storm
Your comments echo loud and clear about America's attitude "We are all victims and the MAN runs everything". If you get upside down in your house, then walk away--Hey, it's your right, right? As long as everything is about ME and my investments go up--then keep your hands out of my pocket. The minute your bad decisions cost you, well my God, why doesn't the government do something about it?

By Rick

Feb 29, 2008 5:28 PM | Link to this

Real estate is local. Inner cities across the US connected to the global economy (such as Atlanta) are still seeing stable or rising prices. The problem is the outer suburbs. We are beginning to see a shift towards prosperity in the city and decay in the suburbs. There has been quite a few articles about this as of late in mainstream publications.

By parker

Feb 29, 2008 1:57 PM | Link to this

only the media can help this crisis start writing positive things encourage people to go buy you can help turn this around people are scared bc of what the media keeps publishing please write some encouragement or oneday your job may be on the line like so many other people right now loosing their jobs find good deals ,write about smart descion making right now lets keep the economy going or its going to get bad

By MO

Feb 28, 2008 9:00 AM | Link to this

Excellent submission BrucePile!
This conversation needed some intelligent input.
BTW this problem "already" affects all of us.

By BrucePile

Feb 27, 2008 4:09 PM | Link to this

There is a prevalent mind set expressed by "a small percentage of people are living beyond their means. It's their problem. No worry." But it's this mind set that has caused the U.S. to allow the proliferation of sliced and diced debt instruments the last 20 years to the point where these have all been neatly stacked into a house of cards. And this is everyone's problem. It's a stability thing. Growing debt eventually causes one person's indiscretion to become someone else's problem. In a discussion on peak oil, I once compared peak oil with a chart on composite debt in the U.S. and refered to it as "peak debt". Someone countered with the point that oil has a geophysical cause for there to be a peak; but there is no geophysical or other such limitation for debt. But there is a limitation - stability. Sooner or later, you run debt into the condition where other people's debt is your problem even if you don't owe a dime to anyone. We have that now with only about $1 in real assets backing every $30 in fancy debt packages floating around the globe. And a cascading of defaults and monetary damage is developing with a large number of buyers of these debt instruments not even knowing who is supposed to pay off what debt. This will cause financial market problems that effect us all as the markets hate uncertainty more than anything.

By OTOH

Feb 27, 2008 1:50 AM | Link to this

A very small percentage of mortgagees have taken out loans they cannot afford. As free men and women that is their choice and their problem.

The housing bubble was predicted and many news articles and opinion articles discussed it 4 years ago. The developers and mortgagors were even more informed than me. They made their choices and should have to live with them.

There are 3 lessons everyone should learn from this: buy only what you can afford to pay for and make sure you save money every payday and do not loan more money than you can afford to lose. Amazingly simple, but some people learn only from experience.

By Wonder Why?

Feb 27, 2008 1:20 AM | Link to this

It's a shame that Atlanta has come to this. Hopefully people will stop coming when we run out of water, and we kick out the politicians at all levels who feel like we have to try to be so far ahead of everyone else, first. Why can't we manage our growth better? It's obvious that growth is not going to pass us by for long, it's just that politicians that are currently in office don't want "no growth" on their time clock. We need to be satisfied with what we got, instead of trying to figure out creative ways to shaft those of us who are or have always been here. I can do without the politicians, and so can everyone else. We need a period where we are happy with what we got, manage the growth, and then decide from there.