1) Housing speculation of any kind should be illegal. 2) Walking away from a mortgage, illegal Free market my ass. All that happens is the lowlife like Mozillo get to keep billions and the taxpayer eats the losses. The average person is an imbecile. Tell them they can live in this house for $700 or whatever a month and the idiot will pay anything for the house itself. This is what happened. This is what jacked the price of homes up to absurd levels. The Feds are asleep at the switch as usual.
Um. So if I buy a house, and then later on decide to sell it, I should be jailed? One of the stupidest ideas I've seen on ET ever.
If Al Gore had won Florida and become President, would Greenspan have kept rates at 1% for 3 years? Just wondering...
Lets put it this way. If you can't tell the difference between someone serially speculating on houses with nonsense leverage, and a legitimate home buyer who decided to sell after some period of time, then you're too dumb to breath.
And now they're making it hard on savers once again, stupid low rates and inflation. Until we get the crooks out of the bloodstream of the system, this will not end.
It's not the speculation that is bad, it's the leverage, all those 100%+, no doc, loans and inflated appraisals that did it, combined with securitization and risk transfer, something like passing the hot potato.
Hate to disrupt anyone's agenda here, but I guess you know that the only folks that got 0% loans were homeowners, not "investors", "flippers" etc. A non-owner occupant could not get a 0 down type of loan. OldTrader
Speculation comes in many forms. Speculators were not limited just to those saying "If I buy this house I can flip it in 3 months for 200k profit!" A bigger and more rampant form of speculation came in the form of the untold millions of people saying "Sure I cant really afford this, but real estate only goes up, so I'll be able to refi later." In re: walking away Walking away is a not a new phenomenon, but its new found prevalence certainly is. The problem is that it may be a perfectly legal and intelligent decision for most of the "speculators" I mention above. The have little to no downpayment to walk away from (or what little they had was wiped out by the leveraged depreciation), so its really a question of the cost of a roof over their heads. With no equity in the question, its really just a price comparison between servicing their debt and renting. Not suprisingly, renting wins. Now, should it be illegal? I dont know- and you wont see me argue for the return of "debtors' prisons". The fact of the matter is that in most states, its legal and has been for some time- and the risk of it happening was not priced into the mortgage rates, further fueling the rampant speculation, and leading to these losses we have been hearing about in the lenders, banks and insurers. Why wasnt it priced in? Because the guy writing the loans knew he wouldnt be holding on to them- they would be sliced, diced and securitized off to "investors."