Busted: Bankers and The Global Economy

October 28, 2008

Upside-Down in Your Home? (Poll)

Years ago, because of the huge amount of money owed on car loans, coupled with low down-payments and “loan rollover”, becoming upside-down on your vehicle or owing more than it was worth at any given time was an increasingly common occurrence. With the contraction of the U.S. and the British economy, more and more homeowners are finding themselves in the same predicament.

In many cases, recent predatory lending meant less down payments and loan qualifications. However, the mortgage housing bubble has lead to downward spiraling values, resulting in owing more to a bank or lender than the house is worth. This has been highlighted in the media and now the United Kingdom is reeling from the same housing contraction.

Reports are that house prices have dropped faster in Britain than in the United States, producing an increase for a prolonged recession. Considering that most citizens have most of their asset value wrapped up in their homes, falling values, especially for recent home buyers is a real financial issue. The media has indicated that American homeowners are leaving their homes, not simply because of affordability issues, but because of refusing to pay for declining home values versus their home loans. Is this really true and could this reasoning pass beyond the United States? ~ E. Manning

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2 Comments

  1. Our collective greed is going to destroy us all.
    Greedy Banks
    Greedy homeowners
    Greedy real estate salesman
    Greedy car salesmen
    it never ends….well…..only now with the bitterly ironic situation of the taxpayers bailing all the scumbags out.
    It’s capitalism when things are good….then they scream for government assistance, (socialism)when thier greed bites them in thier lazy, greedy, asses.
    Living in a home and watching it “appreciate” is not capitalism….its mass self delusion.
    Why should my tax dollars prop up the value of your house, and the banks you collectivley drained and looted with your incessant greed and get rich quick real estate and stock market scheming, you silly retards?

    Comment by Bert Graef — October 28, 2008 @ 7:17 pm

  2. The media likes to make mountains out of mole hills. Yes there are a few, very few who make the stupid mistake of leaving their homes to foreclosure because they feel they are not getting any additional value by making their monthly payments.
    These are very short sighted people who do not think about the harm they are doing to their credit ratings. Not only does the foreclosure damage their credit rating but it has a domino effect. With the lower credit scores their interest rates on their credit cards go up. If they try and finance a car purchase they will pay a much higher interest rate on their car loan. It can takes several years to rebuild a credit rating and these people have no idea of how much money the higher interest rates are going to cost them in the long run.
    Stay put make your mortgage payments and when the economy turns around you will be rewarded with a better credit rating and more equity in your home.

    Comment by Lynn — October 28, 2008 @ 7:29 pm


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