Who is to be blamed for this housing foreclosure mess? Banks or people ?

Question

Who is to be blamed for this housing foreclosure mess? Banks or people ?

Answer 1

People are of course.  You shouldn't buy a house if you can't afford a mortgage.  ARMS were a stupid idea but the people who took them out were even more absurd.  People know how much money they have, how much money they make, and what they can afford for how long if they lose their source of income.  People who got into the predicament of being foreclosed on were mostly people who wanted the status of being a homeowner but not the realistic responsibilities.  For those of us who saved and saved and skipped buying a house in the last low, the foreclosure crunch now has given us time to get a big down payment together and almost purchase homes outright.  We have traditional fixed rate mortgages with low monthly payments because we were financially responsible with our funds and not stretching ourselves too thin.  Just because the option to jump out of a perfectly good plane is there, doesn't mean everyone goes sky diving.  

Answer 2

BANKS!  Becuse  they  mislead  the  people.

Answer 3

No blame necessary.  Just a big boondoggle that entangled lots of people.  Some greedy, some dishonest, some foolish, some innocent.  Just like the rest of America. /

Answer 4

Both, both knew they could not afford the mortgages they were buying.

But, the people wanted the house they could not afford and the mortgage rep wanted the commission.

Both were greedy.

Answer 5

Both.

Banks shouldn't have approved people for loans which they couldn't make the payments on.

People should have read the fine print, realized rates will go up over time, and thus not gotten those loans if they couldn't afford them.

Answer 6

people cause theyre spending beyond their means. banks cause they no people are spending beyond their means and they dont care. when i was looking they approved me for much more than i new i could afford but i didnt take it i new better. so i say both.

Answer 7

Both.  It's natural for people to want to own their home, but people aren't always realistic about what they can afford and they sometimes let others take advantage of them by not reading the fine print when they think they are about to achieve their dream.  On the other hand, the lending institutions have intentionally used appraisals they knew were too high, falsified or allowed brokers to falsify documents, changed terms of loans without notice to the debtors, tacked on fees that would never have been dreamed of in the past, and they didn't really care since they were going to bundle the loans together and sell them to unsuspecting investors on Wall Street so they were reaping only the profits and not the losses when these loans turned sour (or at least until lately when it started catching up with them).  Take a look at cnnmoney.com yesterday for a good piece on it.

Answer 8

Banks....they were giving the $500,000 mortgages to poeple who make $35,000 a year and have 5 kids.

Answer 9

There is plenty of blame to go around,

First and foremost, the lenders get a big slice for developing "creative" mortgage options for people to get into home loans they had no hope of affording.  There is no way a cashier at Target  should have been able to buy a $400,000 home with no money down.

The people buying these homes with "creative" financing, believing Smiley Bob mortgage man who told them they could make this work.

The builders who bought large parcels of property and turned them into subdivisions that are now sitting empty.  

The lending regulatory agencies that turned a blind eye while all this was going on.

And greed of course played a huge role.

Answer 10

Neither, it was the greedy and unscropulous lending managers who realized they could hustle the market. They also realized there would be some retards who would trust ARMs.

Answer 11

The questions is not as straightforward as you ask it.  first, this mortgage mess is happening because of two main things.  One is that people cannot afford the loans they have so they are defaulting on their mortgages.  The second part of this mess is caused by people who owe more on their house than it is worth.  

For the first problem I believe that responsibility lies on both the banks and the people.  The banks should not have made the loans to some of these people.  Ultimately though, the people went for the loans and they should not have.  With this, both are responsible and both should shoulder the burden.

The second part of this mess is being caused by people who owe more than their house is worth.  These people paid too much for their house and are now deciding that walking away from the loan is better than repaying it.  They are leaving the bank holding the bag.  These people are solely responsible for the mess they are causing.  Remember, banks don't set the prices for houses.  One person sells a house and asks for a set amount of money. the buyer comes in and haggles with the seller and they agree on a price.  The bank is solely there to lend money, just like a loan to buy a car or go to school.  In these cases it will only hurt the rest of us in the future as the banks will come up with ways to make everyone else pay for this type of mess.

Answer 12

There is a bit of responsibility on both ends.

The lenders used poor practices when they started lending money based on FUTURE earnings, rather than on what the borrower currently qualified for.

In their greed, they contacted people and talked them into taking out seconds for room additions, remodeling, etc.  telling them, in 5 years, your house payment will go up.  But in 5 years, you will be making more money.  Same with the purchase of first time homes.

Then a bad economy hits and people AREN'T making more money.  They are lucky if they still have a job at all.

The homeowners only are to blame for being talked into such a irresponsible prospect.

I was angry when they gave "bail outs" to the lenders.  If they had given that same money to the homeowner in the form of a low/no interest loan, to pay their mortgage, the lender STILL gets the money and the homeowner can keep a roof over their children's heads.

Instead, the lender got the money AND the house.  Ridiculous.  My house dropped $30,000 in value because there are 4 empty houses on my street.  Not "flippers", but FAMILIES had lived there.

Answer 13

I agree with Jon.  Both are to blame!  In addition to your question I would ask should the government/tax payer bale out the banks and the people that got into the mess?

I say if your going to be stupid you better be tough.  Why should our already inflated, money handling inept government and ultimately it's taxpayers pay for a mistake that had nothing to do with the governments responsibilities.  Maybe I'm just to right wing on this but I hope I am not forced to feel the effects of this.

BTW I own my house... no mortgage, I'm 35... debt free is the way to be baby!

Answer 14

our stupid president...

Answer 15

Both...the people who knowingly took out a mortgage they knew they couldn't handle...you can't be that dumb, that you wouldn't weigh all the pro's and con's...its fine now..we can handle it...without playing the flip side of that...hey Mary if you get Preggo..then we have one salary

we couldn't this, or if Johnny loses his job......they should have bought

a home sure..everyone should have a part of that American picket fence...but they should have looked for a more reasonable fense, and not try and keep up with the jonses..

The Banks..are morally bankrupt...they stink, they took advantage kowingly and did it anyway--and there are downright crooks among them that should be locked up for life..i saw a poor lady 2 kids, mom got sick,,,she called her bank to lower the payments..she wasn't behind at the time,,,the SOB's said NO..she got a 2nd. Mtge, guess what ? she signed her house over to the bank & didn't even know it

that lousy $10,000 she needed cost her $120,000 in legal fees to fight to get claim to her home again, she did it...i think you should throw the attorneys into jail with the bankers, those bums will steal the eyes out of your head and tell you you look better without them, they would steal a hot stove and come back for the ashes.......... BANKS, MORTGAGE COMPANIES & ATTORNEY's should all rot in h**l , but

not until we burn down there houses.

Answer 16

people-they want a house, but will not pay for it.