This article is good in several ways. It makes the point that there is always another way to look at a situation. It suggests that maybe there is some good to come of all this mess, even if the bad stuff seems overwhelming. To the authors point, there are many more unaffected homeowners (broader recession aside) than affected home owners or home-losers. I, for one, sold my house two years ago and rented until last week, when I purchased a foreclosed property from Wells Fargo. Our purchase price was below the estimated cost to construct an equivalent house. Im one of the happy ones.

However, the article makes at least one truly ignorant point. Separately, the article does not go far enough in its callousness or cold-heartedness. When it comes to mass stupidity, brutal honesty is necessary.

First, the article says "Here's another: If you get to live in a nice home for a few years and then lose it to foreclosure, you are not worse off than someone who never got to live in a nice home in the first place." This could be the most ignorant thing I've heard. Its widely accepted that America is a debtor society. We dont save. We dont pay cash. We borrow. Most of us stupid Americans borrow against our house to buy depreciating assets like flat panel TVs and Hummer SUVs. Truly stupid. Given this, its worth noting that a foreclosure means the former owner loses any potential equity that remained in the house. That's wealth that just evaporated. Gone. For most Americans, its their sole source of wealth. To this end, these "lucky former homeowners", the ones author says should feel fortunate, may now be in the group that will never own a home again, or build equity, or wealth. They might not pay for their children's education, perpetuating the cycle of ignorance and economic hardship.

Second, I'd like to point out that we (you) are all to blame. This whole real estate mess was created by us and for us. We (you) took advantage of the easy money. We (you) ignored the potential problems. Now we (you) must deal with it.

Ask yourself, is it possible that nobody in this whole real estate daisy chain knew exactly what they were doing? Conversely, isnt it possible or even likely that everybody (or most) understood the risk they were taking? Is it likely that EVERY home-loser was duped by a crooked real estate agent or mortgage broker/lender? Nope. Its not likely. Its quite unlikely. In fact, that notion is insulting in that it suggests that we (you) are too ignorant or stupid to be responsible for our (your) own affairs. Well, are you that stupid?

Nope. You are not that stupid. You may be that ignorant or, at least, you may be a liar now that you need an excuse or scapegoat after losing your house. Most people who are losing their homes today, knew their mortgage would reset. Most knew they couldnt afford the house once the mortgage reset. However, they assumed they could cross that bridge when they got to it. They assumed their home would continue to appreciate and that they could refinance at a better rate later on. Alright...Maybe the ignorant were encouraged to take this view. So, you are that ignorant? It doesnt matter. Guaranteed....You will deny any personal responsibility.

Real estate agents/brokers? Mortgage sales/brokers? Appraisers? Underwriters? Wall Street bankers? You were trained to know better. You had FIDUCIARY obligations to protect your customer. Yet, every one of you enabled the process, creating and/or taking advantage of procedural loopholes. Every one of you "stretched" or "cheated", just a little bit. Some of you flat out broke the law! Every one of you was financially incentivized to enable the daisy chain. Every one of you encouraged one or many of our ignorant home-losers to take the risk. Therefore, every one of you enabled a systemic FRAUD that has culminated in the worst financial disaster in decades. What you did was no different than what the Wall Street analysts, brokers and bankers did, along side the Enrons and Worldcomms in the 1990's. You all should be ashamed. You all should be held personally accountable, financially accountable.

The point is that, en mass, you all are to blame. You all did this to yourselves. You should not complain or plead ignorance because your are not so ignorant, not too ignorant. At least not that ignorant. You largely ignored the potential risk, either for yourself or your customer. Now you must pay for it. Unfortunately, many of you will likely pay for it for the rest of your life. Conversely, you may not be able to pay for anything for the rest of your life.

What makes me so angry (if you couldnt tell), is that despite the fact that I have a FICA score of 800, that I correctly avoided the crisis and now am benefiting from it, I will be held accountable for YOUR STUPID MISTAKES and frauds!!!!! Its almost a certainty that Government will eventually bail you all out. This means I will pay taxes to fund your mistake. This means I WILL BE FORCED TO PAY FOR YOUR STUPIDITY! This is absolutely unfair. Its certainly less fair than whatever claim of inequity you've built into your excuses and rationalization of losing your house or losing your job or going to jail.

Harsh? Yes. Brutal honesty is necessary in these situations. Where is Dr. Phil when we need him? Maybe a little callousness and honesty will drag you all back to reality so we can fix this mess.

OK...I'm done ranting for now. Go ahead and attack me.

Bravo. Eloquently said in a few more words than needed, but nonetheless all relevant. Republican, you are, I am guessing. Even if not, I applaud your sense of personal responsiblity whereby the ramifications of one's immature actions should be cast soley on the person of ignorance. If I may interject one semi-opposing comment, however, it is that we will have to pay for others' mistakes (as much as I hate to do it) for the greater stability of our financial markets, and indeed in today's flattened world, global financial markets. In theory it should prevent a near credit freeze in such a way that I will still be able to buy a (modest, mind you) car without having to pay cash in full. Credit is a good thing WHEN USED RESPONSIBLY.

I agree. To look at this from a slightly different angle, I moved to Silicon Valley at the height of the dot.com boom and house prices were outrageous. After the bust...house prices steadily rose for 7 more years! Explain that one to me please. Throughout, I sat on the sidelines as a prudent (but bitter) renter waiting for my time to come. My time has finally come - time to bail out the innocent families who were "pursuing the American dream of owning a home".

To JayMM:

You mention that one problem with the article is the statement
"'If you get to live in a nice home for a few years and then lose it to foreclosure, you are not worse off than someone who never got to live in a nice home in the first place.' This could be the most ignorant thing I've heard."

Sadly, I'm thinking that some of these homeowners had little or no equity to lose anyway. In the heyday of mortgages we just went through, you could get interest-only mortgages at the drop of a hat. If you're putting 10% down, taking the rest of the "downpayment" as a draw on a brand new equity line, and putting the rest in an interest-only mortgage, for which you don't pay principal -- then how much equity is being lost here anyway?

The fact that banks were letting people do this is ridiculous. The fact that some people did it is sad, but the blame rests on the banks offering these loans.

Greenie227, you said: "The fact that some people did it is sad, but the blame rests on the banks offering these loans."

I agree the banks had a big part in the crisis by allowing this sort of reckless lending. And so did the real estate agents, and the government (for not regulating the greed and senseless abandon of economic theory). In the end, however, it was the consumer the borrower, the once-had-a-home-owner. Your logic excuses personal responsibility and displaces it to higher institutions (who always work in our best interest, right? Yeah, right.) Admittedly, the situation the U.S. is in right now is because of all the aformentioned parties, but no more strongly than at the consumer's end. A house can't be foreclosed if it was never bought.

Ok, yes some lenders and financial instutions made bad errors in judgement. However, there are many that have not and they are feeling the heat too. Let me give you my background...I am Manager of Loss Mitigation for a major mortgage lender. We did not take the risks of many of our competitors and are here and still in good shape due to this.

However, we are seeing serious fraud issues from current homeowners attempting to buy another home and then lie that they are going to rent out the home they currently own. This is done to reduce the payments on a home that they have little or no equity in and then let the former home go into foreclosure. This is fraud and affecting our market right now. And on top of that there are actually realtors pushing this practice. This is disgusting and some folks need to go to prison for it. Yes, I know there is no debtors prison, but when somebody steals, they go to jail...nuff said...can't believe we have folks that are so twisted they think this way.

Obviously, there are exception to almost every rule. Im glad to know that you believe your firm conducted itself properly.