This makes me cringe

it is a free market. those that lost their homes should have made better life choices. no shame in profiting from being liquid at the right time. the chinese investors are coming in droves. if i had the cash i would be snatching up some of the deals out there right now.

I agree with Snoop. Some lost their houses because they lost their jobs, but many, if not most, were people who bought more than they could afford speculating that house prices would never go down and they'd make money reselling the house in a year or two, even if forced to sell.

FWIW, the more people that invest in the down market, the faster it will pull the US housing market back up. Not that I want it to be back like it was in 2002-2006, but the fact is that the responsible homeowners can not sell their houses at a fair price right now because you have a glut of foreclosures and shortsales selling at 2/3 of the currently appraised market values.

I have seen a number of people on my street alone who bit off more than they could chew and lost/ walked away/ short sale took place.

Then there are some such as myself, who played the part of the "responsible adult" and made sure my house was affordable to me at my circumstances at the time. I did well. Until the economy took a nose dive. I have not worked for 4 years now, I can NOT find a job, let alone one that pays enough for gasoline, let alone mortgage, utilities, food, etc....

I suppose one could argue that this is, indeed, my fault for not "learning enough" or being "proactive enough" in being an expert in everything under the sun. I was trying to concentrate on the jobs I had and have something resembling a life outside of work. Now, I can only find volunteer positions, which I actually enjoy more that much of the total garbage I experienced in the paying work place.

I have friends who are retired who's retirement plans still in the dumps and taking wild swings on a daily/ weekly basis. Is that their fault?

> Then there are some such as myself, who played the part of the "responsible adult" and made sure my house was affordable to me at my circumstances at the time. I did well. Until the economy took a nose dive. I have not worked for 4 years now, I can NOT find a job, let alone one that pays enough for gasoline, let alone mortgage, utilities, food, etc....

I'm in the same boat as you John....it sucks..:-@

It certainly does suck. At least I do enjoy the museums I volunteer at. Interesting museums and good people. I just wish museums had enough money to pay me something! They do treat me well though, and both are close to home

Many, if not most, were people who re-mortgaged once too often, taking money out to buy goods they didn't really need, or who should never have bought a home in the first place because they just couldn't afford it.

However, some were people who played by the rules, bought just what they needed, and saved for a rainy day. Then the great recession came along and there was serious long term unemployment, including professionals who thought they were immune. I have a lot of sympathy for them. My daughter and her family went from well off to food stamps in one quick year, and it was humbling for them. They will never forget that lesson.

100% totally agree with John. While there were definitely people who were irresponsible, there always are, the vast majority lost their homes due to job loss and the picture IS NOT getting any better. Our economy is in the toilet and there's a reason that it's remaining there.

As to the original post and a few subsequent replies I would contend that it would also be irresponsible for most to be a buyer at this point since the trend in home prices is still down. Go figure.

We had 2 homes in Phoenix we bought at high price.
1(mine),I gave it back to the bank.I could never see the value of it coming back.
The other we still own and have re-mortgaged affordably,but it's still nowhere near the value what we paid.
Life is a lesson to learn and we have learned to live a minimilist way by choice these days.
🙂

"This makes me cringe

"Sydney investor and Qantas pilot, Jeremy Laws, says the Australian investment frenzy in the US is attracting a great school of Marks sharks."

You're either buying or selling in this great big world.
There are already a number of bitten MBS investors, and many investors trying their best to sue and force put backs from securities with poor or fraudulent underwriting standards. One of the bigger and more interesting cases currently is MBIA vs. BOA.
They know they're holding huge sacks of dung and they're spending billions to not get left holding the sack.

This lady is a two-fisted fighter and lays out all the unpalatable details.

" ..11,000 appraisers signed with their names and addresses:

We request that action be taken to hold the lenders responsible for this type of violation and provide for a penalty on any person or business who engages in the practice of pressuring appraisers to do dishonest appraisals that do not provide for independent judgment. We believe that this practice has adverse effects on our local and national economies and that the potential for great financial loss exists. We also believe that many individuals have been adversely affected by the purchase of homes which have been over-valued."

Abigail C. Field

There are many many more financial bloggers exposing the ongoing fraud that is once again taking place here in America.

"This makes me cringe

Ok that one story by Abigail doesn't exactly address your question in some compendious manner, but if you spend a minute reading some of her articles you will come to understand what has been transpiring in the U.S. home mortgage market. She is colorful but she does her homework.

Yves Smith over at www.nakedcapitalism.com won't give them a pass on this crap either.

"This makes me cringe

When I bought my house we used Countrywide. I remember, early in the process, asking the mortgage lady "what happens if the appraisal comes in low". She said, "Don't worry, we got a guy that always comes in where we need it to be". Then said, "let's add $500 just to cover unexpected costs". Sure enough, that appraisal came in at the asking price + $500.

Countrywide is now bankrupt and part of BOA.

> 100% totally agree with John. While there were definitely people who were irresponsible, there always are, the vast majority lost their homes due to job loss and the picture IS NOT getting any better. Our economy is in the toilet and there's a reason that it's remaining there.
>
> As to the original post and a few subsequent replies I would contend that it would also be irresponsible for most to be a buyer at this point since the trend in home prices is still down. Go figure.

Haven't seen quite the same thing...

First off, there were a lot of people who are not "real-estate savvy" who believed experts, who TOLD them that their best bet was to buy using things like NINA loans, because they could always sell the house at a profit. Sure, they were naive to believe that, but they were trusting so-called "experts". If you hire an "expert" in a field, you expect them to know what they are doing, and not simply rip you off for short-term profits for themselves and leave you to hang. That's unconscionable, professionally unethical, and disgusting, but it's what was happening in the US from about 2000 til the collapse started in 2007.

Second, I've seen the economy getting significantly better over the last year. That may be due to where I live, and it may be worse in some other areas of the country, but it's far better than what was happening in 2008, when everything was in a free-fall, with HUGE job losses every month, and complete fear stifling all aspects of our economy.

Third, the latest home report actually had home prices RISING. And I know we're working on multiple single-family subdivision plats right now, for the first time since 2008.

So things seem to have improved a fair bit since the worst point, which was probably in April 2009. People may wish they were improving faster, but it's far better than the drastic decline we saw in 2007 and 2008.

"This makes me cringe

"Countrywide is now bankrupt and part of BOA."

Not bankrupt, rolled up into BAC, Apparently you could have heard a pin drop across the industry when the deal was announced and inked. I think the whole industry knew what crap Countrywide was. A good many of the large financial institutions purchased mortgage originators to keep the steady supply of mortgages for securitization.

An article today from Naked Capitalism:

"Two experts who foresaw the housing bust see no reason for optimism on US housing. The Case Shiller index release today showed that housing prices fell in 16 of 20 cities in February. Robert Shiller in a Reuters interview said “I worry that we might not see a really major turnaround in our lifetimes.”

If you were to listen to anyone concerning the U.S. housing market, you'll want to listen to Robert Shiller.

"This makes me cringe

I was pre-approved for my house loan. When I found out the amount, I did some digging (online mortgage calculator) and quickly found that the loan amount was out of my reach. When I asked the loan officer why I was approved for such a high amount, his response was that they "assume there are two people"........

There weren't two people then (only a big lovable cat) and there are not two people now.....

I can see there's more than gets posted down here. And can appreciate people invest in whatever is out there.
Also understand some but not all overspend big time and then land themselves in their own mess.

I have a long held (personal) belief we should all be able to have a decent home and own it.
For many its a luxury to be only dreamed of (speaking about here on Australia) and yet its one of the most basic requirements in life.

I think I was either lucky or savvy (or both) in my home purchase...

I bought in July 2007, right at the height of the housing market, for $190,000. I refinanced last year, turning it from a 30-year mortgage into a 15-year mortgage (saving me a projected $180,000 in interest), and had my home appraised as part of the process, and it came in at $210,000.

But I bought on the west side of Colorado Springs, in a neighborhood where less than a handful of homes have gone on the market in the last few years. (It's a very desirable neighborhood, although not a "rich" neighborhood.) It's completely different on the east side, where the "sea of houses" were created during the housing boom, overpriced, ten feet from each other, with houses that fill up most of the lot (by contrast, I live in an older neighborhood created in the 1950's, have a 1600 sf home on 13,500 sf of lot, and have mature trees and large spacing between me and my neighbors, in addition to a large backyard for my dog). So when houses go on-sale in my neighborhood, they get snapped up very quickly. The last one was someone across the street and a few doors up from me, and it sold within a week of going on sale, for asking price (YES, even in this economy).

So I think there ARE good deals to be had, it just might be tricky finding them...

Do you have a crystal ball?

People need to purchase a home in a rising market; you pay what you have to in order to get the home. The market was being driven upwards by slimy banks that turned our homes into another speculative profit making venture.

I have no sympathy for the Banks; they can eat it as far as I'm concerned.

Some people bought in a rising market and have no hope of getting above water again in their lifetime.

The next wave is coming.

This is not the fault of the average home purchaser; Wall Street decided this was the next big speculative bubble money making opportunity and they destroyed the housing market, not the average purchaser.

Sure some people were irresponsible but a lot were just doing what they thought they had to do to get a home.

It's easy to look back now and say they shouldn't have done it but it's too late for shoulda-woulda-couldas now.