Witness two conversations I’ve had with people in the past week who earn a good living, both own condominiums in two different cities in California, one in a suburban city and one in an urban city. The former bought a condo at $119k in about 2003. He told me that the mos recent sale of one of the units in his complex was for $22k, yes, $22 thousand dollars. My friend still owes $90k and he has been denied a refinance to get a lower interest rate by his bank not because he has poor credit, which he does not, is that he has no equity. My other friend bought her condo for about $450k in the city and at the peak of the market these condos were selling for $600k. She still owes $300k on her condo and the last one sold in her complex went for $102k.
I asked both of them if they are considering walking away. Both waffled a little. My friend with the condo in the city said there’s still one lady who’s living in one of the units who hasn’t made a payment after foreclosure two years ago…two years the bank has allowed her to stay in the condo, so far.
So I have to wonder, where is the economic responsibility for this mess and what if the home owners who are upside down in their homes all decide to walk away? They’re getting pissed, they’re confused about why they aren’t being allowed to refinance when the interest rates are lower, even though the property is upside down. They are all upside down in their loans now and wasn’t the bailout meant to give banks money to loan? Shouldn’t they be making those loans, and making them to people who are being responsible and helping to keep us from slipping off the ledge of the double dip recession?
I keep hearing that this mess started because someone was asleep at the wheel of regulation, well I’d say that someone is asleep at the wheel of the bailout. Someone in Congress, someone in the White House, someone on Wall Street better wake up. The people who ARE responsible are getting bitter and angry, they are paying the freight and being economically responsible, so far.
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