Quote:
Originally Posted by rydawg
Your right Todd. This is why the economy is struggling so hard. I remember from 2002 to 2006, people were putting offers on houses more than what the house was actually selling for just so they would get it.
Example: In 1999 a house sold for 199,000 and then in 2002 it was now sold for 249,000, then next year it was sold for 289,000, then in 2006 it was then sold for349,000.
Also, if a house sold for 349,000 quickly, then the house in the same neighborhood was trying to be sold for 359,000. It just kept on climbing the ladder.
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So is the problem the people who wanted to buy the house? Or the enabling lender who gave a loan for more than the house was worth? The car salesman who talks the car buyer into a higher payment than they wanted so he can make a bigger commission...who's fault is it when the loan is defaulted and the car gets reposessed? How many more people would be in that kind of trouble with their cars if the dealer said...gee, I'd love to get you into this car for $400/month, but see that couple standing over there? They'll pay $425/mo., but if you pay $450 I'll give the car to you!
If the gov't eased lending rules, it was so people could buy that $199K house, not so the real estate people and the banks could collude to drive the price up to $349K.