I think that summary was well written, and accurate. I home there is a big correction, as there should be, I don’t wish suffering upon anyone, but many people threw logic out the window on this one, they became emotional, and stupid. They bought with no money down, int. only loans, adj. rates, and then refied to all hell. They bought cars, trucks, toys, even more homes with their equity. They paid absolutely ridiculous prices for their mediocre tract homes. The taxes that they now pay are even more ridiculous. The home they just bought in 05 for $500K, should easily be worth $700k in a year or two, just like the last two years, right?
They did not think logically, they forgot history. They became impatient. They said to hell with saving up money, who saves, when you can take a loan out even for your 20% down? Some were duped by friends, family, even agents, and lenders. They saw at least one person make a small fortune on owning their own home, and did everything in their powers to duplicate them. Only the monthly payment mattered, not the amount owed, but still they now “owned their own home”. They felt sorry for the renters in the community, while the renters wondered, “what’s the difference, between me and them? I pay less per month than they do, and live in a nicer home. How can they own a home, when they owe all or more than what it is worth? With an interest only loan, they don’t even pay down the principle balance, but what do I know? I just rent.”
I don’t think as many of these people will spent a lifetime paying of their bad investment, instead, I believe most in that position will just eventually walk away from their homes. Call me cold, but I won’t feel too bad for them.
