"You can't blame consumers for wanting to live the "American Dream." These companies knew exactly what they were doing and they knew they were taking advantage of the opportunity. I think these lenders were predators and should be held accountable 100%." -- Kim, Indiana
"There are two primary sectors to blame. First obviously are the lenders who get so smitten with the opportunity for growth in receivables, that they forget about the basics. It doesn’t matter how good the interest rate you’re getting is if you don’t get the money back to begin with. And it doesn’t matter how good a borrower’s ability to pay is today, if it’s unlikely that in a year or so when payments are bound to increase (not only from interest rate increases, but tax increases from increased property values, etc.), that the borrower’s income isn’t likely to increase at the same rate. Secondly are the mortgage brokers who are worried only about the commission they’ll get when the loan closes, and aren’t above giving directions to a borrower on what to put – or not put – on their loan applications, as well as suggesting ways to write a real estate contract so it appears to be something it’s not. Yes, I’m talking about loan fraud! People typically think of lenders when you talk about loan fraud, but in many cases, they can only base a decision on what they see, and sometimes, what they see is not what they’re getting." -- Mike K., NC
"Who is to blame? The idiots who took out loans that had payments that were more than the income they had coming in, that is just dumb. On top of that, they used the loans to buy things that were extremely overpriced. I love this kind of behavior because the smart people all knew this was coming and have positioned themselves to profit from this mess. Live, learn, and profit! To all those who are crying about losing their homes, next time seperate emotion from logic. Emotion is the quickest way to the poor house. Fools and their gold soon parted....HAHAHAHA." -- Ron G., Rancho Cucamonga, CA
"The people who borrowed the money and the companies that loaned it to them are the one responsible. The more this country looks to the government for direction the more distance we put between people and their accountability for their actions. If you have bad credit and a financial institution makes you a loan is there a surprise that when the economy slows down some portion of the loans go south? No. The financial institution has plenty of well educated people and knew the risks. As a borrower if you were not aware of the chance that you could loose your house then you didn't do your own due diligence. The real losers in this are the people that own the properties neighboring these foreclosures since their values have declined. Or maybe their values now really reflect what the homes are worth.
It is a very simple scenario to predict: People who do not have construction skills buy houses, outsource most or all of the work, and sell a house they bought for $200,000 for $300,000 after adding $25,000 of improvements. Now, can you really believe that the "Service" that they provided was worth the $75,000 profit they made in a few weeks? If providing construction supervision was so profitable then general contractors would be charging a whole lot more since that is all these house flippers really do. The fact that there are countless TV shows on "Flip this House" and people are buying real estate on speculation says that there is a housing bubble. If a financial institution is dumb enough to lend money to a high risk applicant in this type of market then they can't be surprised when the music stops and a few extra chairs are missing.
Let Darwinism work in the financial markets and the consumer market. Maybe people will be smarter when they realize they have to pay for their decisions and maybe the financial institutions that survive any subprime impact will actually be the ones that saw the risks and made the smarter decision by avoiding them. The lesson to investors is simple - looking for quick returns comes at a risk. Don't take the bet if you can't pay the price. This holds true for an individual investor or a financial institution. A fool and his money are soon parted. It's just a matter of time." -- Carl B., Olivet, MI
"The problem lies on the sub-prime lenders. Greed to make larger returns overtook common sense for the borrower to pay back loans at higher rates if there is a hiccup in the borrowers earnings." -- Phil