Losing Your Home because everyone lives in Fantasyland

RealClearPolitics - Articles - Losing Your Home: “Those unscrupulous lenders love to do their sanctimonious riff and claim that their ‘innovative’ loans provided a public service by enabling previously unqualified buyers to get their families into their own homes.
But they knew those families wouldn’t stay in those homes long.
They knew. They knew. They knew.”

Everyone should have known, including the buyers. Why did it happen? because everyone is living in Fantasyland. The buyers think everything keeps going up and they think they will get raises or equality loans to pay for the house they know they cannot now afford. The lenders think that if these people default property values will have increased and the houses will be worth more than the loan. The stock holders of the loan companies want the lending rules relaxed so they can make more on their investment this quarter.

Don’t be so sure that those who can afford their loans will not also pay for this. If they try to sell their house they will get much less, if they can sell it at all. If things get much worse and real estate collapses countrywide it will impact everyone in this country. There will be a severe recession or even a complete collapse of the economy or else there will be a massive government bail out. In that case the collapse of the economy will come a few year later because of higher taxes, inflation, or default on our national debt.