Posted by: Gay Potter | July 24, 2008

Phoenix’s Real Estate Market – Who’s to Blame?? Let’s point fingers!

I receive weekly real estate updates of press articles from First American Title compliments of Brian Zapoticzny! This article really tries to tell us “who done what” in the current real estate predicament in the Phoenix Metro area. The bold italics is my synopsis of the article – followed by FATCO’s – then the complete article.

In summary: the finger pointing goes like this

LENDERS: didn’t care if buyers could make the payments – just gimme a commission!

BUYERS: bought more home than they could afford with shakey credit financed by loans they did not understand. When the home was not worth what they owed on it – they walked away.

INVESTORS: lenders packaged the subprime loans selling them to Wall Street who offered high yield bond type investments to buyers who were unaware of the underlying risks of the sub prime crisis.

FEDERAL RESERVE: – let’s blame it on Allan – he’s gone now.

I say – GET REAL – How could Greenspan possibly know the unscrupulous lending practices that lay ahead – he seems like the honest type!!!

REGULATORY AGENCIES: underwriting guidelines??? That works for me -fund it! was the general rule! We are just trying to get the real estate market out of the slump it is in!

WHITE HOUSE & CONGRESS – it’s their fault – they encouraged home ownership with tax incentives and offered community reinvestment programs.

Let’s get real on this one – I work as a home retention consultant, it is my experience that the people who are in danger of losing their homes are the ones directly affected by the sub prime nightmare – not because Uncle Sam gave them a hand.

FOREIGNERS: Blame it on CHINA! If they would not have been around we might have been paying attention to what was really going on!

The article, From home buyers to bankers, many blamed for housing crisis, from the Arizona Republic, reports that at the top of the boom in housing in 2005, lenders, buyers, mortgage investors, regulators and others were straying far from usual practices. Unqualified buyers reaching for unaffordable homes, subprime-loan offerings, Wall Street’s greed for unqualified buyers, Wall Street’s greed for mortgage securities and indifferent oversight created a toxic mix. The article gives a run-down of each player in the crisis, including lenders, borrowers, investors, the Federal Reserve, other regulators, rating agencies, the White House and Congress and foreigners and gives a summary of what happened by each party, their current situation and their next act to ease the crisis.

From home buyers to bankers, many blamed for housing crisis
Russ Wiles – Jul. 19, 2008 12:00 AM
The Arizona Republic

to read the article in it’s entirety use the following link

http://www.azcentral.com/realestate/articles/2008/07/19/20080719biz-creditcrisis0719intro.html

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Responses

  1. I still believe its Americans as consumers…we still live by credit…we have weddings that cost ten times our monthly incomes…we buy homes based upon “how we look” rather than what we can afford…we buy cars based lookin’ good rather than invest some of that cash in an intrest bearing account. We/I have to change our thinking . a millionaire can drive around in an old pickup truck and could give a hoot about what the average person thinks. Why? BECAUSE HE’S A MILLIONAIRE! Thanks for your post it gave alot to consider.


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