Everyone blames the banks for making these loans that millions are now defaulting on. I am now going to take the banks' side just to stir it up a bit.
Joe Blow goes into a bank and gets a killer loan. "Hey, I got this great ARM for my house. 1% for 3 years. Wow!"
Friend: Wow! That is awesome, dude.
3 Years Later
Blow: This mortgage blows, man. My payments just went through the roof! I'm paying, like, 8% now. I don't make enough to do it.
Friend: Bummer. Damn banks should not have done that to you.
Blow: Yeah. Maybe the government will help.
Friend: Yeah, dude.
OK, folks. Who signed the loan? Who knew at the time of signing that when the ARM period expired that the payment would go up? In both cases Joe Blow. The bank did nothing to hide this fact. No lender is allowed to hide this fact. Joe Blow is just plain stupid and in a way greedy. I can see the desire to own a home. I am not going to run out and buy one knowing that I would not be able to make payments! That is called common sense. Yet, Blow and family get this great loan for $100K OVER what they need for the house and spend it on things like a plasma t.v. (which will need replacement after 5 years anyways), a new SUV with all the trimmings, and a sand toy for each member of the family including Fluffy the dog (or is that a cat).
Because Blow wants all the toys, he lives outside his means. This is the American way. Inflation would not be so bad, the cost of living would be more stable, and life would be more realistic and balanced with the rest of the world if we crazy Americans would use our brains. Credit for this, credit for that. We live in debt. We do not live in reality. Everything must have a price. The lawyers make sure of that.
Get real. Life within your means. There is no need to keep up with the Jones's on your block because they will probably go bankrupt before you know it. Some people have money, some do not have as much. Live with it. Deal with it. Don't expect the government to take care of you. Only liberals think this way. Take responsibility and work for it yourself. Take care of yourself. Let the government take care of the scary folks trying to bomb the living shit out of us.