Greed is greed, period. It is not something less just because it is engaged in by a "homeowner" or a "labor union". People get caught up in their own greedy expectations and eventually the actions they take on those expectations produce situations that work against them. If you are going to be greedy, then at least be smart enough to know how soon you need to "cash in" on it.
"The lending industry encouraged that transformation, promoting not just subprime loans but mortgages requiring little or no documentation of income, no money down, and interest-only payments.
That statement is total misinformation; it conflates issues related primarily to the "sub-prime" mortgage market with all mortgages. Almost all mortgages made with "little or no documentation, no money down and interest only payments" ARE "sub-prime" loans - loans with interest rates a number of percentages higher than "prime" mortgage rates.
Next to zero mortgages can be obtained at a "prime" mortgage rate without income "documentation" and only a very small percentage can be made with "prime" mortgage rates and either no down payment or interest only payments.
"But rising interest rates and falling home prices put particular pressure on people who live in the homes they own."
No it does not "put particular pressure on people who live in the homes they own", for over 75% of American homeowners who bought their homes before the current boom (before current inflated market prices) and who are not looking to sell their home right now either. Additionally, for the vast majority of American homeowners, who bought their homes before the current "housing boom", their eventual "sale prices" will still reflect appreciation over the price they paid, 5, 10, 15 and 20 or more years ago.
"The American Dream is overdue for revision."
More alarmist media nonsense; but what can you expect from MSNBC. The majority of the "foreclosure" problem rests with "sub-prime" loans, which represent all of 20% of the entire mortgage market. The majority of "sub-prime" foreclosures are in the 80% of the "sub-prime" market made up by ARM "sub-prime" loans (adjustable rate mortgages), or 16% of the entire mortgage market. And actual foreclosure rates on those sub-prime ARMS are running between 20-30% of them - or 3.2% to 4.8% of the entire mortgage market. The American dream is far from dead and the current housing market is in a spectacular bust after a long-running and spectacular period of growth. In the end, more Americans than before the "boom" will still be homeowners after the current shakeout ends.
Good post.
Somewhat true, but it's an argument of semantics. Subprime LENDERS are (were?) a different category than A-paper lenders offering no-income verification or low down payment products. If you got a subprime loan from a subprime lender you paid 2 points over the best rates out there, whereas if you had A credit and went with an A-paper lender on a program not verifying income, you were only a half-point or so higher than the best rates available.