Financial Guru's ... Housing/Economy question

[The Moz 71]

I asked this before on a post but little response. Can anyone explain how Housing in 20 years doubled around 4-5X in cost ( some places more some less )? Salary has maybe doubled once in some case a little more or less. I am just curious how noone saw this as a problem and put a stop to it when it would have made a difference. Did people really think this wasn't going to be a problem down the road or did they just not care becasue it wouldn't really come to a head untill 10 years or so had passed. So now Financial instutions made all kinds of money off people borrowing - then poeple evetually had to borrow so much they got hung up in Arm loans to make it cheaper and when rates went up go bankrupt and both them and the banks lose. I don't prentend to know much about the economy which why I am just asking maybe I am missing something here. I just can't figure out how housing could be allowed to increase 4-5X while salary increased maybe a 1/3 of that - an how noone really came out much on how this was such a big problem until it was to late? Now we are throwing a trillion of tax money to try and fix it rather than attack the reason it happened in the first place. As a republican ( at least on paper as of now ) I am against big goverment - but damn we actually need ###### regulated before a dime of tax money is spent.

[KSB2424 3,173]

I think it happened like this:

 

Back in the day when you got a loan from the bank you paid the bank back. Simple. Over the past 20 years the banks started selling those loans to mortgage brokerage companies who put all these bank loans together into one big bucket and they are traded like stocks. Big business that got bigger. This market wanted more and more loans so they urged the banks to lower their lending standards to create more loans so there was more money to trade. This surge in the market of potenial buyers drove up the prices. This bubble got bigger and bigger until it finally burst. Now everybody gets focked.

[GettnHuge 2]

I think it happened like this:

 

Back in the day when you got a loan from the bank you paid the bank back. Simple. Over the past 20 years the banks started selling those loans to mortgage brokerage companies who put all these bank loans together into one big bucket and they are traded like stocks. Big business that got bigger. This market wanted more and more loans so they urged the banks to lower their lending standards to create more loans so there was more money to trade. This surge in the market of potenial buyers drove up the prices. This bubble got bigger and bigger until it finally burst. Now everybody gets focked.

 

Once such things get traded around they go to places where they are not so regulated and accounted for. But what's also traded

is the risk. The risk is divided thinner and thinner and eventually builds up thick throughout the system yet nobody can see it.

[davebg 0]

In addition to the stuff that has already been mentioned, the other major factor in all of this mess has been the prevailing notion that everyone should be able to purchase a home, whether they could ever have really afforded it or not. Much of that was an idea perpetuated by those with something to gain (real estate agents, mortgage brokers, etc), but from what I understand, it was also something that was pushed by certain elements of our government.

 

Pretty much, it's the same old story...political correctness run amok. Can't afford to purchase a home? Don't worry about it. You don't have to go back to school to get a better job like your parents did. We'll just bend the rules a bit and sell you a mortgage that you will have no chance of paying once the rate resets. Don't worry though, you're in your own home right now and really, everyone deserves that.

 

It's the same as that PC crap about how everyone should go to college. Um...no...no they shouldn't. Some people just are not college material. This world needs fry guys and ditch diggers. Keep it up and my bachelor's degree will be the equivalent of my mom's HS diploma.

[TheBlade 3]

In addition to the stuff that has already been mentioned, the other major factor in all of this mess has been the prevailing notion that everyone should be able to purchase a home, whether they could ever have really afforded it or not. Much of that was an idea perpetuated by those with something to gain (real estate agents, mortgage brokers, etc), but from what I understand, it was also something that was pushed by certain elements of our government.

 

Pretty much, it's the same old story...political correctness run amok. Can't afford to purchase a home? Don't worry about it. You don't have to go back to school to get a better job like your parents did. We'll just bend the rules a bit and sell you a mortgage that you will have no chance of paying once the rate resets. Don't worry though, you're in your own home right now and really, everyone deserves that.

 

It's the same as that PC crap about how everyone should go to college. Um...no...no they shouldn't. Some people just are not college material. This world needs fry guys and ditch diggers. Keep it up and my bachelor's degree will be the equivalent of my mom's HS diploma.

Ding, ding, ding....You are correct, sir.

[Vikings4ever 568]

Keep it up and my bachelor's degree will be the equivalent of my mom's HS diploma.

It kinda already is. High school degrees used to mean something. Now all it means is that you're not a COMPLETE focktard.

[BLS 314]

In addition to the stuff that has already been mentioned, the other major factor in all of this mess has been the prevailing notion that everyone should be able to purchase a home, whether they could ever have really afforded it or not. Much of that was an idea perpetuated by those with something to gain (real estate agents, mortgage brokers, etc), but from what I understand, it was also something that was pushed by certain elements of our government.

 

Pretty much, it's the same old story...political correctness run amok. Can't afford to purchase a home? Don't worry about it. You don't have to go back to school to get a better job like your parents did. We'll just bend the rules a bit and sell you a mortgage that you will have no chance of paying once the rate resets. Don't worry though, you're in your own home right now and really, everyone deserves that.

 

It's the same as that PC crap about how everyone should go to college. Um...no...no they shouldn't. Some people just are not college material. This world needs fry guys and ditch diggers. Keep it up and my bachelor's degree will be the equivalent of my mom's HS diploma.

 

Yes, we can thank Bill Clinton and Jesse Jackson for this little morsel.

[DuckStupid 40]

I asked this before on a post but little response. Can anyone explain how Housing in 20 years doubled around 4-5X in cost ( some places more some less )? Salary has maybe doubled once in some case a little more or less. I am just curious how noone saw this as a problem and put a stop to it when it would have made a difference. Did people really think this wasn't going to be a problem down the road or did they just not care becasue it wouldn't really come to a head untill 10 years or so had passed. So now Financial instutions made all kinds of money off people borrowing - then poeple evetually had to borrow so much they got hung up in Arm loans to make it cheaper and when rates went up go bankrupt and both them and the banks lose. I don't prentend to know much about the economy which why I am just asking maybe I am missing something here. I just can't figure out how housing could be allowed to increase 4-5X while salary increased maybe a 1/3 of that - an how noone really came out much on how this was such a big problem until it was to late? Now we are throwing a trillion of tax money to try and fix it rather than attack the reason it happened in the first place. As a republican ( at least on paper as of now ) I am against big goverment - but damn we actually need ###### regulated before a dime of tax money is spent.

 

There's a lot of STUPID people out there. There's also some smart people out there that are very willing to take advantage of those stupid people.

[Mungwater 601]

Keep it up and my bachelor's degree will be the equivalent of my mom's HS diploma.

 

I think that time has passed five years ago.

 

I know a guy who has a bachelors in accounting, and his company is paying for him to get an MBA. Well, his first semester, guess which class he failed, yep, accounting.. Not got a C, straight up F.

 

Everyone has a degree nowadays, I think we need to take a step even farther back. Start with keeping score on little league, everyone doesn't deserve a trophy, go earn it.

 

I think we're seeing the results of the pussification of this great nation.

[DuckStupid 40]

I think that time has passed five years ago.

 

I know a guy who has a bachelors in accounting, and his company is paying for him to get an MBA. Well, his first semester, guess which class he failed, yep, accounting.. Not got a C, straight up F.

 

Everyone has a degree nowadays, I think we need to take a step even farther back. Start with keeping score on little league, everyone doesn't deserve a trophy, go earn it.

 

I think we're seeing the results of the pussification of this great nation.

 

 

Word. Nobody can fail at anything anymore. We need them to succeed so we bail out the losers. It's a focking joke. Might as well be a communist nation as that's where we're headed. Everyone's equal.

[buffalobillsffl2003 0]

Mr. AmerikanDillHole makes 28k a year........he sees a McMansion he knows he can't afford, can never pay back, somewhere in the 375k range.......fuckingbrokeagecocksuckers sign off on this shitknowing the mofo isn't going to be able to pay it back....the tard has no idea what an adjustable-rate mortgage is.....So everyone else pays cause we have fuckingretards of all ages running things. Running them into the ground.

 

20 years ago in high school, I used to look around the classroom and think "THESEFUCKING TARDS ARE GOING TO GET MARRIED, HAVE CHILDREN AND ATTEMPT TO RUN THIS CUNTRY? THIS CUNTRY IS FOCKED!!!!!!"

 

That prediction was too easy.

 

 

Hello Kanada!

[The Moz 71]

In addition to the stuff that has already been mentioned, the other major factor in all of this mess has been the prevailing notion that everyone should be able to purchase a home, whether they could ever have really afforded it or not. Much of that was an idea perpetuated by those with something to gain (real estate agents, mortgage brokers, etc), but from what I understand, it was also something that was pushed by certain elements of our government.

 

Pretty much, it's the same old story...political correctness run amok. Can't afford to purchase a home? Don't worry about it. You don't have to go back to school to get a better job like your parents did. We'll just bend the rules a bit and sell you a mortgage that you will have no chance of paying once the rate resets. Don't worry though, you're in your own home right now and really, everyone deserves that.

 

It's the same as that PC crap about how everyone should go to college. Um...no...no they shouldn't. Some people just are not college material. This world needs fry guys and ditch diggers. Keep it up and my bachelor's degree will be the equivalent of my mom's HS diploma.

 

While is true to a point -- 20 years ago middle income families could own a decent home without having to be finacially strapped to do it. The problem is with the cost of housing increasing far beyond the increase in salary.