Many people rely on their real estate agents and brokers as well as the mortgage lenders to assist them in getting the best deals when they purchase a home. Many of the folks who are finding themselves in foreclosure were not looking for McMansions, they simply wanted their own home. I have heard from a lot of folks who were told they could afford more because of ARMs and other less than perfect mortgages. My husband and I, when we were looking to buy, took a first time home buyers class to make sure we knew the ins and outs of mortgages. When we were told we could get more house with an ARM, I knew that it would great when things were going well but if market changes caused that rate to go up, we could be screwed and end up losing our home. I was not willing to put our security on the line, and I did not want a mortgage that my payment could change. I would not consider anything but a traditional mortgage so I knew that no matter what, my payment would be a set amount. Many folks did not set out to end up in a position where they would lose their home but were led to believe that they could afford more home than they should. Many of the people who go in to buy a home don???t know much about mortgages and do have to rely on those in the business. When they are led into an ARM without the full knowledge of what can happen, they are being set up to fail, just as they have been . We cannot put all the blame on those who are being foreclosed on without spreading the blame to those who convinced them that it was the way to go.
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A Wealth of Concerns
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"Any company that is built around the need to add debt is in trouble," says Mark Cuban, owner of the Dallas Mavericks and founder of HDNet. He ranks 161st on The Forbes 400 this year with a net worth of $2.6 billion. "The process of deleveraging is industry agnostic. If I had the time, I would be researching every company that needs renewable and expandable debt to survive and would short the sh*t out of it."
One thing that's clear is that despite the turmoil of the times, successful businesspeople have no shortage of ideas where to invest. On Monday, the Atlanta Journal-Constitution reported that one of Warren Buffett's subsidiary companies bought a corporate furnishings division from Aaron Rents.
Wyly, a billionaire who is not on The Forbes 400, advises to invest in areas you know are "rock solid." The author of 1,000 Dollars and An Idea likes companies like energy giant BP. He points to its investments in renewable energy, low price-earning multiple and management team.
As they say, buy when there's blood on the streets. But that raises another question: Who's to blame for the recent torrent?
Mike Bloomberg casts a wide net. The mayor of New York, former Wall Streeter, and founder of financial services company Bloomberg (which made him the 8th richest person in America with a net worth of $20 billion) told reporters Tuesday that, "You can't just blame the banks, you also can blame the people that took out mortgages ... We were brought up that you first had to put some savings together and then enjoy. But this whole society has gotten to the fact that we're a 'now, give it to me today' kind of society. I think regulation has not been adequate.
"There's no one person to blame other than all of us," he added.
© 2008
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