I am a canadian but I follow american current events very closely. I have friends and relatives there who are well off. I get all the american tv and cable news shows. The big mistake made in the U.S was, as people have inferred, huge loans to people who had no ability to pay it back. I watch all the networks up there. Sixty Minutes, Dateline, 20/20, Fox news. I heard last week that ELEVEN MILLION ameican homes are owned by people who OWE more on their house than they can sell it for. That translates into about 50 million people using the family of four figure. Incredible. Story after story shows people who earned between 30k to 50k or less as a family and were then given huge loans for 300k to 400k mortages with nothing down. No way these people could ever pay it back. In fact they’d have a hard time paying just the interest, let alone the prinicipal. I also noticed many of these people the lame banks and loaning institutions took advantage of were african americans being convinced they could have the american dream. American banks, bankers, loaners and lenders failed the public miserably. This stuff does not happen in Canada namely because banks won’t allow it and secondly most people up here tend to live within their means. Excluding new immigrants (namely east eurospeans who come from ex communist regimes) who think credit is an asset rather than a liability. Truth hurts. But it’s all here plain as the sky.
I’m a Canadian. While there are some factors up here which are advantageous, housing is still overpriced. It’s not just that they made high risk loans, but demographics are going to be hitting housing demand.
There are many, many people, at least where I am looking to relocate, sell, etc, and very few houses are selling. Pretty much everyone who wants a house has one.
>>>American banks, bankers, loaners and lenders failed the public miserably.>>>
No, the banks did not fail the public. It was Fannie and Freddy (both democrat programs) which forced the banks to give loans to people w/o the assets to pay for them. If they didn’t they were accused of “red lining,” and fined very large amounts of money for each time they turned down a dead beat.
Pres. Bush asked Congress for oversight on Fannie and Freddy 14 times, and was denied it. Otherwise, none of the foreclosures would have needed to happen.
Eventually, the banks became so desperate to avoid the large penalty the government forced on them for not giving mortgages to people w/o the ability to pay them that some of them paid their assessors to upgrade the value of the houses which Fanny and Freddie wanted to force them to give mortgages on. Then came the packaging of the unpaid mortgages and the smaller repackaging, ad infinatum, until the buyers didn’t even know which bank held their mortgage. That left the buyers with houses that were vastly overrated, and are now underwater, meaning that they can’t sell the houses for the amount they agreed to pay for them.