You Thought You Had an Equity Line

Nor or they responsible for the crashing home prices.

I agree with the poster. The average consumer who is paying their bills and DO have pristine credit are SOL because of OTHERS. So how is that their fault?

“I agree with the poster. The average consumer who is paying their bills and DO have pristine credit are SOL because of OTHERS. So how is that their fault?”

Is it MY fault that they don't have “pristine credit”?

WHY should I absorb their stupidity?

BTW, we have excellent credit.

I'll tell you a secret,

WE LIVE WITHIN OUR MEANS.

We pay for our cars in CASH,

We paid off our mortgage by making double payments.

Is there some reason why

OTHERS CAN'T LIVE WITHIN THEIR MEANS?

The answer is NO!

BTW, we also have savings and ENJOY life, with what we have left over. Anyone can do it!

“It’s not as simple as that — by letting the market run its course innocent folks will pay for the stupidity of others by way of decreased property values, loss of jobs, inflation, lack of access to credit, and a dozen other ways.”

That's already happening as it should. The market is adjusting on it's own to proper value. Job loss doesn't equate lower house values or a market correction - apples/oranges. Lack of access to credit is because there folks are OVER EXTENDED and DEFAULTING so yes, credit should tighten up due to people LIVING BEYOND THEIR MEANS and now being cornered. All these excuses don't justify others absorbing their living beyond their means.

Job loss doesn’t equate lower house values or a market correction - apples/oranges.

Construction, fixturing manufacturers, lumber industry, etc. etc. have all taken a hit.

I don’t see this as a moral issue, i.e. “PEOPLE LIVING BEYOND THEIR MEANS SHOULD GET WHAT THEY DESERVE!” I see it as a matter of being pragmatic. There’s no question we’re in for a bumpy ride. The only question is whether we should soften the ride or allow wrenching — and quite frankly, brutal — results following a correction?

both are complicit.

You have the banks who pressured the assessor values to higher and higher or lose work. The consumers who inflated their income.

It was a viscious circle. Instead of using the forclosure and bankrupcy courts to resolve this civily between teh two contracting parties, the congress critters with the help of k street lobbyists shut the bankrupcy solution. We now have consumers who are finding it easy to just walk away via a ch 7 since a work out is closed to them.

You are delusional. There is at least 100-1 leverage in credit, to restore that to 1-1 would be to utterly destroy the world economy.

Exactly - while irresponsible consumers ran up the debt, it was some really poor credit granting decisions by the lenders themselves that racked up such a problem.

Maybe just saying “no” a few more times might have helped.

They are government sponsored, not supported.

No one really understands FNM. You could write a thesis and still could not undstand them or their books.

Our society as a whole, individuals, companies and the government, has willfully violated these simple rules and created an imaginary credit castle in the sky.

This is exactly the point as folks point the finger at others is that WE are collectively guilty.

Proud that your house trippled in value in the last 7 years ? Mine did, and it is not that incomes have increased anything like 3 times in this area. It is simply Greenspan's expansion of credit. Folks can borrow what they cannot afford, but if they want to buy a house around here, they have to borrow, regardless. Yes they can move to WV instead and spend 4 hrs per day commuting. Some do. But time is money and the cost is paid for.

Jobs - Well, how much of the US economy has become dependent upon expansion of credit? The entire housing and real estate sector, including the overpriced boutique kitchen and bath design/refurbishment shop down the road, which for a mere 20 or 30% off the top will provide a "perfect" kitchen for you. How much time do you spend and how much money do you spend doing or paying for services that could not be sold on the open market to willing customers. All of that is because leaches have managed to attach themselves to our credit system and suck blood out of it.

There must be a grand retraction, don’t call it a recession or a depression, in credit. Credit must be returned, at the individual, corporate and governmental level, to its basic principles.

There must be a grand restructuring of our economic order, what are folks going do and what are they going to get paid to do it. A health care system gone awry where most of the employees are "administrators" and not doctors or nurses. A government where the small number of educated and professional experts are drowned in a sea of bureacrats processing unneeded forms collecting information that the government neither wants, needs or should be entrusted by a free people to possess. A legal system where an abusive law suit filer is limited to one suit per month, except on special application (how about no more for the rest of his life except on special application). A legal system where judges are no longer wise because we pay them $80,000 in places where an attorney in private practice can make 5 times that, and which is reduced to an endless spiral of bureaucratic process, out the other end of which, if it comes at all, rediculous judgments that are meaningless.

This is what the sons and daughters of the greatest generation have made of what was a great country.

Who do you believe is responsible for the credit mess, if not the consumer?

Ultimately the federal reserve and two recent chairmen in particular, Burns and Greenspan. Volker was a temporary disruption and Bernanke, whatever his faults, did not create the mess.

Central banks control the expansion of credit, but they did not. Why? Well the conflicting demands of our society - guns AND butter. Vietnam and the Great Society, which continues unabated through to today. We have gotten away with it for so long because of seignorage on the world's reserve currency. The world, however, has lost patience with taken slips of paper in exchange for goods and services and now we have hit a brick wall. Expanding credit money now makes us poorer each time we do it and not richer at the rest of the world's expense.

The consumer has had little choice. You have to live in an economy with the currency in place, and the currency in place in the US is not cash$ but credit $. When Greenspan expanded the economy by driving up housing prices and making home equity more available, he made it certain that 1/2 the folks in the country would have to tap into home equity to survive.

There is more to an economy that "what you can afford." In a modern society a family of 4 needs clothing, shelter, communications, transportation, education, and as in all societies, commune with his fellow humans. Don't borrow money to buy the truck and you cannot commute to your job. everything else then collapses.

Condemning those who participated in the economy and did what Greenspan virtually forced them into doing is as much on him as it is on them.

The Austrians tell us this is the inevitable outcome of what he did. He is not innocent because he was well schooled in Austrian economics. Long long ago, he even believed in the gold standard.

Who do you believe is responsible for the credit mess, if not the consumer

The consumer is responsible for his personal economic situation. If it is bad, it is his fault. The credit granting industry is responsible for it's economic situation. If it is bad, it is it's own fault.

We are currently in a bad "credit mess" while I personally don't feel the ramifications of that because I have seen to it not to borrow more than I can afford. I saw the housing bubble for what it was and planned accordingly. When I bought my house 2 years ago, I found a fixer-upper HUD repo which I purchased for about 20% under the neighborhood market value. After some repairs and upgrades I now have about 30% equity. Even if the market tanks another 30%, I should be able to get out of the house fairly easily.

I suppose the major banks are not in as bad a situation as it would seem because they have planned ahead as well. They have lined the pockets of legislators who will bail them out so they will not be held accountable for their decisions.

These fees can be significant, Mr. Kratzer said: on a $50,000 line, for example, fees of $1,500 are common. If the line is being frozen at, say, $25,000, why shouldn’t the borrower be entitled to receive a refund of $750?

Uh, because the contract the borrower SIGNED says they aren't?