MGU, see that wasn’t so hard. You made some decent arguments and supported them with a mix of fact and opinion. We do agree on many points with these exeptions: I’ll be paying 300k or sub 300k, I won’t profit from the downturn, I’ll just have a very comfortable and fixed mortgage payment so I may continue my hedonistic lifestyle. Your 401k and my 401k will be fine, well mine will be because I am at least 20 years from drawing on it and since I still make weekly deposits the cost averaging actually benefits me because nothing lasts forever, there are still more ups and downs to come in those 20 years. The only people who will realize losses in their 401k are those who are about to start drawing and most of them transitioned out of risk as they approached retirement. A drop in interest (note the spelling of this word, just a tip because you’ve never spelled it correctly) rates would actually hurt those people who are nearing retirement.
Yes, nothing will happen to the people that committed fraud as far as jail time goes but the invisible hand of economics is quite vengeful. Lenders that knowingly turned a blind eye to a borrower’s ability pay are losing money, losing their jobs or going bankrupt. Borrowers who lied about their ability to pay are finding they can’t pay and are losing their houses, the punishment fits the crime because most of it wasn’t really fraud.
There won’t be a real bail out, just talk.
We agree that these people shouldn’t have gotten these loans but regulations are not the answer. Lenders take the most risk in loaning money, some of them made some bad bets but the market will shake itself out, it always does.
Your final statement that it was all the lenders fault is akin to blaming the tobacco companies for people smoking or putting all the blame on drug dealers, just because they sell it doesn’t mean you are blameless for buying it.