Comments on: When the housing bubble bursts close to home http://debralegg.com/2009/02/19/when-the-housing-bubble-bursts-close-to-home/ 9to5to9: A working mom's mad adventures in boy land Tue, 07 Sep 2010 19:22:12 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Debra http://debralegg.com/2009/02/19/when-the-housing-bubble-bursts-close-to-home/#comment-1401 Debra Fri, 20 Feb 2009 04:23:26 +0000 http://debralegg.com/?p=4842#comment-1401 Actually, I did use the brain the other day on <b><a href="http://debralegg.com/2009/02/16/home-loan-help-a-bitter-pill-but-needed-medicine/" rel="nofollow">this post. </a> </b>This one was just a follow-up because the neighborhood stuff hit me harder than I expected it to. We're actually pretty much in agreement on this one, Kevin. Part of me leans toward smacking 'em all for creating this mess -- I'm more than a little angry about it because I deliberately didn't play but now I'm going to pay. But my practical side says we need to try to fix it, pretty much in the way you outlined. And I realize that any attempt at a fix isn't going to save all the, well, I call them home occupiers because many of them never paid a blessed thing but interest. The biggest thing that bothers me about the proposed fixes is too many fixate on the notion that we have to stop prices from falling. Um, no we don't, because out here at least they still haven't fallen to pre-bubble levels, though they're getting close. Actually, I did use the brain the other day on this post. This one was just a follow-up because the neighborhood stuff hit me harder than I expected it to.

We’re actually pretty much in agreement on this one, Kevin. Part of me leans toward smacking ‘em all for creating this mess — I’m more than a little angry about it because I deliberately didn’t play but now I’m going to pay. But my practical side says we need to try to fix it, pretty much in the way you outlined. And I realize that any attempt at a fix isn’t going to save all the, well, I call them home occupiers because many of them never paid a blessed thing but interest.

The biggest thing that bothers me about the proposed fixes is too many fixate on the notion that we have to stop prices from falling. Um, no we don’t, because out here at least they still haven’t fallen to pre-bubble levels, though they’re getting close.

]]> By: Kevin Duffy http://debralegg.com/2009/02/19/when-the-housing-bubble-bursts-close-to-home/#comment-1400 Kevin Duffy Fri, 20 Feb 2009 04:00:28 +0000 http://debralegg.com/?p=4842#comment-1400 Debra, It's not going to get any better any time soon, either. It's the fault of a lot of individual people, most of whom actually believed that they were doing the right thing at the moment -- be it exaggerating on the income, fudging the appraisal, brokers shopping the loan -- everyone was getting what they wanted and/or needed at the time. Now the question is what do we do about it. Do we take punitive action against the home-buyer (certainly not going to call them a homeowner), the broker, the banker, the appraiser, the guy who securitized the CDOs and sold them on Wall Street? Or do we try to rehabilitate the system, work-out the loan terms so the home-buyer can stay current and continue to live in the home, actually start checking peoples income to debt ratios and running ability to pay calculations and also let the lawyers smack a few mortgage companies in lender liability suits just for the "checks and balance" side of such a suit -- costs a lot to defend against and the settlement hurts the bottom line and the ego, too. While one part of me says punish them all, the other side (probably where I really lean) says let's rehabilitate a broken system and stop this vicious downward spiral before it is truly uncontrollable. What do you think - -you don't really say -- you just try to bring a tear to the readers' eyes regarding the plight of your neighbors -- that does not help -- use that big ole brain of yours and tell us what you think would fix the problem and stop it from happening again twenty years from now when your Big Guy and my Big Guy are ready to buy a house. Debra, It’s not going to get any better any time soon, either. It’s the fault of a lot of individual people, most of whom actually believed that they were doing the right thing at the moment — be it exaggerating on the income, fudging the appraisal, brokers shopping the loan — everyone was getting what they wanted and/or needed at the time. Now the question is what do we do about it. Do we take punitive action against the home-buyer (certainly not going to call them a homeowner), the broker, the banker, the appraiser, the guy who securitized the CDOs and sold them on Wall Street? Or do we try to rehabilitate the system, work-out the loan terms so the home-buyer can stay current and continue to live in the home, actually start checking peoples income to debt ratios and running ability to pay calculations and also let the lawyers smack a few mortgage companies in lender liability suits just for the “checks and balance” side of such a suit — costs a lot to defend against and the settlement hurts the bottom line and the ego, too. While one part of me says punish them all, the other side (probably where I really lean) says let’s rehabilitate a broken system and stop this vicious downward spiral before it is truly uncontrollable. What do you think – -you don’t really say — you just try to bring a tear to the readers’ eyes regarding the plight of your neighbors — that does not help — use that big ole brain of yours and tell us what you think would fix the problem and stop it from happening again twenty years from now when your Big Guy and my Big Guy are ready to buy a house.

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