Westport, Connecticut Moves

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Sub-prime crisis - homebuyer share of blame

Earlier today, Alan Nisen posted a blog about who was to blame for the sub-prime crisis.  He very cogently spelled out the responsibility of the mortgage brokers, the banks, Wall Street and the Government.  Certainly, each of these group have their share of blame.  However, some of the responsibility also has to lie with the consumer.

Granted, some homebuyers were naive and duped into believing they could "buy now, pay later",  However, I'm sure many realized, with little income and no assets, they would be turned down if they applied for a loan to buy a car.  Yet they chose to believe that they could purchase a house and through appreciation, it would pay for itself. 

I think this country needs a reality check.  I realize home ownership is the American Dream, but it used to be understood that, before you could purchase a house, you had to be able to afford it. 

The delusion is not limited to the low-income, poorly educated segment of society.  I've winced when supposedly intelligent people have told me of their plans to take a seminar to learn how to buy and sell real estate, with no money down.  I'm sure you've all seen the ads. 

 "Two years ago, I only had $1.98, to my name and now I'm worth millions.  You too can make a fortune in real estate.  Simply join the thousands of others who have learned to live the good life, by signing up for my seminar."

I'm astonished that they don't recognize the similarity to the old "snake oil salesman."  Is the dream of riches and the desire for instant gratification, so strong, that we, as a society, choose to view lottery tickets and get-rich-quick schemes, as the answer.

Unless we get back to the strong work ethic, that built this country, this will not be our last "crisis."

Marilyn Katz

      Marilyn Katz

    Berkshire Hathaway Homes Services New England Properties    
     203-429-1041
  Servings Westport, CT
  and the surrounding communities  

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Copyright © 2013 Marilyn Katz, All Rights Reserved

Comment balloon 6 commentsMarilyn Katz • June 14 2008 02:49PM

Comments

Great post especially the "work ethic".  Maybe some blame should also fall on the Real Estate Agent, who was more concerned with a commission than helping the customer look after their interests?  All it takes is one bad apple (real estate agent) to spoil the barrell (our reputation)

Have A Great Day

Posted by Doris Freeman, Broker/Agent, Realtor, Madison-Gibson-Crockett (RE/MAX REALTY SOURCE) about 10 years ago

Doris-  You're correct.  There were certainly some real estate agents, who share in the blame.  Hopefully, many of them will be "weeded out" by the housing crisis, they helped bring about.

Posted by Marilyn Katz, ABR, e-PRO - WestportCTProperties.com (Berkshire Hathaway HomeServices New England Properties) about 10 years ago

I was preaching to a young man about these seminars and said to him, "If it sounds too good to be true, it is not true."   He said, "They use that in their seminars.  They say the rich people will say that to you but it really is that good.  That's how the rich people got rich but don't want you to know it."  Can you believe that!!!!

Posted by Barbara S. Duncan, GRI, e-PRO, Executive Broker, Searcy AR (RE/MAX Advantage) about 10 years ago

Barbara-  Unfortunately, they don't want to hear logic.  If it was that easy, we would all be millionnaire, real estate tycoons

Posted by Marilyn Katz, ABR, e-PRO - WestportCTProperties.com (Berkshire Hathaway HomeServices New England Properties) about 10 years ago

Amen to that Marilyn!!! Snake oil salesmen are the right term. Also, "if it's too good to be true, it usually is to good to be true."

Consumers must take responsibility for their own fiscal fitness.  GREAT POST!!

Lisa

Posted by Lisa Lambert, Esq. 1031 Exchange Expert (The Law Offices of Elisabeth A. Lambert) about 10 years ago

Lisa- I really do have compassion for the innocent folks, who were suckered into some very questionable mortgages.  But, the overall fault lies with the greed that permeated the full spectrum of those invloved, from the little guy, who thought he had found a way to beat the system, to the Wall Street gurus, who knew exactly what they were doing.

Thanks for stopping by.

Posted by Marilyn Katz, ABR, e-PRO - WestportCTProperties.com (Berkshire Hathaway HomeServices New England Properties) about 10 years ago

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