The Homeownership Obsession

2 million jobs (professional) have been outsourced to India in the last 8 years. Middle Class? What middle class?

The article quotes an economist, Mark Zandi, as stating: "In 2005, mortgage delinquencies were low. Regulators couldn't easily make "the case to lenders that their lending standards were out of whack." What kind of excuse is that for what is clearly a failure by the Federal Reserve Bank to properly regulate the financial industry? We've all been talking and reading for the last several years about how over-priced the housing market was becoming, and how over-extended new homeowners were getting, all with irresponsible no money-down, interest-only or interest deferred loans. The job of regulators is to help identify and AVOID problems; not to REACT to them after the economy goes to hell in a handbasket. Where is the accountability? The good news is that foreign investors won't ever be suckered again into buying the securitized garbage issued by American financial institutions. Just as it took $4 a gallon gas to get Americans to ditch their gas hogs, a credit squeeze is just what this country needs to change the spendthrift mindset of the American consumer.

The article quotes an economist, Mark Zandi, as stating: "In 2005, mortgage delinquencies were low. Regulators couldn't easily make "the case to lenders that their lending standards were out of whack." What kind of excuse is that for what is clearly a failure by the Federal Reserve Bank to properly regulate the financial industry? We've all been talking and reading for the last several years about how over-priced the housing market was becoming, and how over-extended new homeowners were getting, all with irresponsible no money-down, interest-only or interest deferred loans. The job of regulators is to help identify and AVOID problems; not to REACT to them after the economy goes to hell in a handbasket. Where is the accountability? The good news is that foreign investors won't ever be suckered again into buying the securitized garbage issued by American financial institutions. Just as it took $4 a gallon gas to get Americans to ditch their gas hogs, a credit squeeze is just what this country needs to change the spendthrift mindset of the American consumer.

Having paid nearly $14,000 this year so far on urgent home repair issues, I agree with you completely. My husband and I will be able to save nothing toward retirement this year because of home maintenance. I would gladly rent again, so urgent repairs would no longer be my problem.

I don't mean to sound like a mean individual, but there was something I noticed watching videos of recent foreclosure eviction notice servings: Everytime the sherrif pulled into a driveway of a house that was about to be served an eviction notice, there was @ least 1 or 2 new cars (usually SUV's) in the driveway. Could it be that consumerism has finally taken it's toll on the consumers themselves by making them overspend? Are some folks living beyond their means just to be a homeowner? It just strikes me that in a time when bank practices are suspect, the economy is taking a downturn & the price of everything is going up, frugality may be the step to take. But I guess not. I feel for anyone who has lost their home, but when I see the "bling factor" strewn about the property, I just have to wonder.

You don't need to 'take up arms' to fight this enemy, for he is 'us'.....GREED. The Forclosures, the economic downturn, the bank failures - they will 'right' America's ship once more. People will learn to spend within their means, because the lenders will learn to force the issue or go into bankrupcy themselves. It is not the Government's responsibility to regulate the spending habits of the individual, capitalism will provide the medicine needed to cure this ill.

Ok, some thoughts....1) home ownership to me is one of the top personifications of the American dream. And going along with that is the fact that you can deduct your mortgage interest, while if you are a renter, you can deduct practically nothing (in CA there is a renters credit) and after paying months and years of rent, you own nothing, while you do eventually own your home and the equity that comes with it. 2) reducing or eliminating the mortgage interest deduction and requiring 5% down would be a disaster. It would slam the door on a whole lot of people. We bought our house in 2002 with a 103% loan, and if we had to wait until we had 5% of the then purchase price, we would probably still be saving.

3) what we really need to do is simply eliminate the fraud from the process. 0 down works with people who are responsible. Interest only and subprime loans need to disappear. And if you are not qualified because you want too much house for your income or your credit is bad, then you need to wait a while and prove yourself or buy a cheaper house.

4) One big problem that occurred in my area is that during the boom, people excessively got equity loans to buy extravagant stuff and then when things went south, they had negative equity and that just harps back on responsibility. We refi'd once to get rid of our ARM and PMI and then again with cash out for an addition to the home. If you got equity out to buy a $50,000 car and flat screen tv and anything else with bells and whistles, then you get what you deserve. We honestly should be looking at cases one at a time to see whether we should be bailing someone out or letting them lose their house. I am sure lots and lots of good people just got bad luck but are otherwise "good bets" and some are just not ready for the responsibility.

Overall though, home ownership should be encouraged and we can do it without a massive overhaul to the system.