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John Adams once said in court, “Facts are stubborn things.”

If you can’t afford a house, you shouldn’t buy one.

Simple as that.

Apparently, there are a lot of people in America who cannot count.

Good on Charley.

Yes, facts are stubborn things. Some of the folks were told they had fixed rate mortgages, that they could afford. But the paperwork was switched to adjustable, and they were cheated.

The other problem is that the bank has a fiduciary responsibility to the shareholders and depositors to NOT give loans to folks who can't pay it back. That is fraud, and it's been done on a scale that long ago should have had 'banker X charged under RICO' on every daily headline for the last couple of years.

Fraud on homeowner by way of insurance switch: Now It's Kickbacks Too (Force-Placed Insurance)

Fraud on homeowner by way of faked loan workouts: Heh, Look - It's Lootie The Bankster!

and: Gee The FRAUD In HAMP Is Coming Out?

fraud during the mortgage setup: Oh, It's Those E-Vile Borrowers! Oh Wait... It's Not?

Sure, there were some who took on more risk than they should. But that doesn't give the bank the right to screw them over again as they try to work it out. Nor does it excuse the bank from having lied to some at the start, nor does it excuse the bank from having sold the mortgage to more than one MBS setup.

Blaming the folks who bet wrong is a red-herring to cover up for the unbelievably huge fraud going on here.

http://www.businessinsider.com/michael-hudson-the-monster-2010-10

An acquaintance filled bankruptcy and lost their house this summer. I never will understand that. They lived in their house for at least 20 years so there had to be plenty of equity built up but who knows if they had a second mortgage or what. Still I can't see their payments being that much because it's a crappy little place. Less than their monthly beer cost. They both have decent paying jobs so that's not the problem. They were low lives to begin with and just decided not to pay any bills for over a year. Thinking back over the years, coworkers and such who have filed bankruptcy have all been low lives and filed just so they wouldn't have to pay their bills and they got to keep their new vehicles.