Reply #5: Not just [View All]

[SheilaT]

irresponsible lenders and irresponsible buyers. There was a lot of ignorance on the part of the buyers, some of it quite willful. It's commonly accepted that no one bothers to read all the documents they sign when buying a house. And not reading is encouraged. I tend to read everything I'm going to sign, and have taught my sons the same. It's interesting being with the oldest when he's buying a car because he takes the thirty minutes necessary to read what he's signing. Anyway, read everything before signing has never been more important.

There's also a significant number of people who have lost jobs and so cannot make mortgage payments. There's also the drumbeat of "you must own a home, only a fool rents" nonsense. There are many for whom renting makes more sense, but that alternative is rarely pushed.

Maybe the very biggest underlying problem is the mortgage interest deduction. If that did not exist people would never be inclined to buy more home than they can really afford, and prices would not have been driven up.