Originally Posted by Cylon Baby
Combine the lack of education of most Americans with the complex process of buying a home and you get...the current situation!
Studies have consistently shown that Americans ranks among the least (if not THE least) financially educated nations in the western world. Now, in a situation like this, there are unquestionably numerous factors invovled, but this lack of financial understanding only serves to make a bad problem worse.
In my town, there are no shortage* of families that make about 70k a year living in $200,000 houses. Obviously, part of that can be blamed on the fact that housing prices were inflated beyond any rational sense, but at a certain point isn't it incumbent on the buyer to say "You know, I shouldn't do this. Long term, it isn't a financially responsible decision." Yeah, home loans were being handed out like candy at Halloween and everyone wanted to get a piece of that pie. But the buyers didn't stop and ask themselves "You know, this adjustable rate mortgage looks great now, but is it going to stay that way?"
And I don't want to sound like one of these "BLAME THE CONSUMER!" people. I realize the preasure on people in, as you pointed out, an incredibly materialistic society. I also understand the desire to give one's family a nice home and good standard of living. And I understand that it was things like that that made it all the easier for the economy to take the turns that it did. Most people are well meaning and were simply grabbing the opportunity that was presented to them, but they never once considered that they make be making a deal with the Devil.
And, to be honest, my sympathy starts to deteriorate when I look at the financial decisions of some of these people. For example, I have a family member that lives in a $500,000 home. She doesn't work, and her husband works in Real Estate. He does ok for himself, but they live in a resort town, so his business is VERY seasonal, meaning that there are long stretches with no money coming in. So, what do they do? Take out any and every loan they can find, with no means to pay them back, of course!
The thing that blows my mind is that they COULD still live a very comfortable lifestyle with the money he brings in. They aren't content to live that life, though. They've got a house they can't afford, vehicles they can't afford, and on top of that they owe several thousand dollars in back taxes. Sure, they had these offers dangled in front of them, but they abused the system and now the reality is that they'll probably be losing the house in the next 9 months.
So, in a situation like that, am I REALLY supposed to lay all the blame on the financial end? Believe me, I know that there are plenty of well-intentioned people being fucked over because of all this, but there are also a ton of people that knew damn well, or at least had an idea, that they were milking the system without care of the long term implications.
*Well, there wasn't. That's changing now.