I feel the problems we face boil down to the lack of responsibility of the citizens of this nation. Yes, decisions for pulling back regulations were made during the Clinton administrations that allowed banks and financial institutions to gamble on us the way they did. Yes they continued to be further loosened during the Bush years.

The housing market was exploding with people who made far too little and were betting on the value of their home and properties doubling every few years. The big banks were betting with the same optimism about all their loans coming back making crazy money off the consumers. Assuming that mortgage values could keep inflating, supporting bigger sales and bigger mortgages. All this phantom money passing back and forth selling a home every year back and forth between different owners each bumping up the price another $50-100k each time they did this. Each time a new closing went though, ultimately one of those big banks was skimming something off the top. Now they could make money off the same house by several different mortgages all being traded back and forth within the middle teir banks.

I was seriously looking for homes when this explosion was happening. I recall joking that 1/2 the homes I passed had For Sale signs on them. Every 6 months a different Realtor company.

I knew what I could afford. I knew I needed to count on my interest rate staying a certain level. I knew what kind of payments I could maintain.... (show all)

Many of my friends and family tried to convince me "this is the right time to buy". That may have been true for financial short term gain for a few short years. That did not change the fact that I could not safely afford any home that I wanted with the prices exploding the way they did. I could have counted on the value going up and selling it. I could have wagered that I would be making more money every year after for the next 15 years. I did not get myself into crushing debt just on the chance that one day soon this will pay off.

So I place the bulk of the responsibility on the people who needed to look at an interest rate, pick up a calculator and figure out what their payments would be and how they would be chipping away at that principle over the next 30 years. People acted so surprised that a variable rate meant variable rate.

Before I even spoke to a Realtor I knew roughly what I could afford base do on what interest rate I was getting. Again I must place primary blame on the people.

I must disagree with agentrnge's shoutback. The 'people' were just the fish that took the bait. I do agree, that greed and ignorance were rampant among home buyers, sellers, mortgage brokers and realtors - like a feeding frenzy - but were not at all primarily to blame for the housing bubble.

When government policy opens a floodgate of policies effecting the free market, such as 'outofoverdrive' brings to our attention in the WSJ, it was equivalent to throwing food to hungry sharks. It becomes obvious that the events that led up to the bubble bursting were strategic outcomes of some poorly thought out political policy.

I've always thought that this world-wide economic disaster and the subsequent bail-out fiasco was the fault of a few conniving, selfish entities. It is - in a sense, to continue the analogy, the work of greedy fisherman filling their nets with as much as they could get away with.

It is my hope that they, themselves, get caught and stand trial for what could well be considered, the largest theft of wealth, productivity and prosperity in the history of the World.

PROTIP: If you're a single mother working at Denny's, you cannot afford a $240,000 mortgage. If you're a single mother working at Denny's, you cannot afford a $240,000 mortgage. If you're a single mother working at Denny's, you cannot afford a $240,000 mortgage. If you're a single mother working at Denny's, you cannot afford a $240,000 mortgage. If you're a single mother working at Denny's, you cannot afford a $240,000 mortgage. If you're a single mother working at Denny's, you cannot afford a $240,000 mortgage. If you're a single mother working at Denny's, you cannot afford a $240,000 mortgage. If you're a single mother working at Denny's, you cannot afford a $240,000 mortgage. If you're a single mother working at Denny's, you cannot afford a $240,000 mortgage. If you're a single mother working at Denny's, you cannot afford a $240,000 mortgage. If you're a single mother working at Denny's, you cannot afford a $240,000 mortgage. If you're a single mother working at Denny's, you cannot afford a $240,000 mortgage. If you're a single mother working at Denny's, you cannot afford a $240,000 mortgage. If you're a single mother working at Denny's, you cannot afford a $240,000 mortgage.

I LOVE PAYING EXCESSIVE TAXES BECAUSE PEOPLE DON'T UNDERSTAND BASIC MATHEMATIC AND ECONOMIC MECHANISMS BUT STILL BELIEVE THEY CAN MAKE A PURCHASE IN EXCESS OF A QUARTER OF A MILLION DOLLARS.
LIQUIFY THE STUPID.

No one should be approved to borrow a quarter of a million dollars unless they qualify. LIQUEFY The STUPID should be shared with the many entities to blame for this mess. Shame on the banks for offering products that qualified the unqualified, Realtors that sold them on homeownership, mortgage brokers that sold a product based on their own gain, Wall Street traders that sold the bundled debt, and the legislators that brought on this whole mess by encouraging the liberal initiative that EVERY American should own a home regardless of circumstance.

If you were a single mom working at Denny's, prior to the legislation that enabled banks to make these outrageous loans, you would have been escorted to the front door - ASAP. Before this craziness, lenders only approved mortgages based on 20% down, and monthly payments not to exceed 25% of gross monthly salary. It was not unusual that a married couple with a 20% down payment, excellent credit and two incomes above the 25% monthly limit, were denied a mortgage because the young wom... (show all)

an could potentially become pregnant and potentially not contribute to the debt obligation. That was a common reason given for denial!

Also, there was never a guarantee that buying a home was an investment that could be cashed in. Buying a home, was simply, making a home for oneself, not a landlord.

Bankers have come back to these sensible limits (perhaps without the prejudice for pregnant women) and are revisiting good credit lending practices. Bad loans make bad banks.

It is only within the last few years that this crazy lending has made money available to a waitress at Denny's, and only by legislation that made it possible. Granted... the waitress is in a fantasy world - that she could ever pay back $240,000: but shame on the broker, the bank, the traders and the investors that perpetuated the dream. And shame on the legislators that gave birth to this fantasy that brought down the economy of the entire world.

Yes I will admit that the changes in policy allowed lenders to lend to higher risk borrowers. Yes that allowed them to make more sales, more frequently. Yes the Denny's waitress living in fantasy land could get a mortgage.

I like the idea of government keeping its hands out of as many things as possible. Unfortunately people will continue to make bad decisions, and neglect common sense. As a result we have hundreds of thousands of governmental laws, hundreds of thousands of corporate policies, hundreds of thousands of financial regulations, attempting to compensate for lack of common sense.

If the laws state I am allowed to go 150 mph on a road, that does not mean I can, or that it is safe, or that my situation or condition will even allow it to be possible.

I maintain the view that we as individuals are responsible for our actions.

If we act responsibly, governments, corporations, and financial monstrosities will not need to hold our hands and attempt to think for us. This hand holding and constrictive guidance only limits our freedom.

I'm in total agreement. Somehow society has fallen into the belief that the government must take care of them, and tell them what to do. And making matters worse is the fact that people rely on the government and other citizens to bail them out when they screw up, as if they deserve it. So you have a huge portion of the population walking around with a sense of helplessness mixed with a sense of entitlement -- a horrible combination, based entirely on the idea that people aren't responsible for themselves or their actions, and they don't have to be.