mallarde

Personal Responsibility and the Housing Bubble

How many investors read a prospectus? What?! That is not the issue.

These people claim that they did not even know what their payments would be. Either there was fraud or they were irresponsible. One or the other. I would guess that fraud accounts for maybe 5% of the foreclosures. Greed accounts for the rest.


On Jan 04 09:52 AM rm wrote:

> [What happened to putting 20% down on a home?]
>
> If you'd like housing prices to deflate another 50%, then requiring
> a 20% dp would do nicely.
>
> [What happened to taking out a mortgage where the payments were affordable
> for the duration of the loan?]
>
> Now there's a good question. Pre-2003, you couldn't sell an adjustable
> rate mortgage with a shotgun in your hand.
>
> [The doctor admitted to not reading any of the loan documents saying
> she did not have time to do that since she was busy running her medical
> practice.]
>
> She's really not that unusual. Due diligence is a chore. How many
> average investors read a prospectus, much less get on any conference
> call, or check a company's financials before buying a stock? Watching
> Cramer or reading a blog is what passes for research.