Housing prices are in a bubble in much of the U.S., 70% above 100 years of norms. Like those that bought gobblegook.com at $300/share in 1999, people who paid outrageous prices for houses they can't afford are going to lose. It's unfortunate, but those people just need to walk away from their loans and go back to renting. It's the people who loaned them the money who are really going to take a beating.

The flipside of this is that housing costs will come down, which seems to me to be a good thing(I get the same house or condo for a lower price, my standard of living goes up). If the cost of any other good or service was coming down it would be hailed as a good thing, but for some reason the last 3 or 4 years people have assumed buying real estate was a get rich quick scheme.
z | 08.29.07 - 11:25 am | #

"seven million people will default on their mortgage loans"

"Clinton is proposing a $1BN bail-out fund"

$1,000,000,000/7,000,000 defaulted loans = $143/defaulted loan

Seriously, do these poeple have any basic math and problem solving skills. And the media is just as bad for not asking the senator if she thinks $143 per loan will bring any relief at all. That said, I agree completely with Leo's comments.
Kevin S. | 08.29.07 - 1:10 pm | #

The "I deserve it" attitude is disgusting. There is no God-given right to a self-defined "nice house."

My family of four lives in a small post-war Cape in a lovely New England town. We have a creek in the backyard, and can walk to the beach. The prior owners raised a family of four here, but we find the 1,100 square feet tight for our family of four. We have redone every room in the house and are doing an addition soon. The previous earners had a different definition of nice than we do.
Mrs. Kuhl | 08.29.07 - 2:40 pm | #

I bought my 2006 Nissan Altima with no money down, because I could still make the payments with a cushion in case I lost my job or some unforeseen circumstance. Loan repayment increases that are written into the contract don't even come close to unforeseen circumstances.

So where is the difference in my buying a 850 BMW on credit and defaulting on the loan? I deserve a nice car in which to drive to work!
Area Man | 08.29.07 - 3:21 pm | #