I have seen buyers who were told that their payment could increase because of the type of loan they were getting and they could still not see past then end of their nose.

I have seen quite a few new home builders (vinyl villages) push buyers into homes using their preferred lender and the buyer had no clue as to what was happening, only that they were getting the new home they fell in love with. Fast forward to today, taxes are being assesed on the new construction, ARM's are adjusting, or that interest only payment is now calling for the principle to be added...

Here in Indiana, property taxes are being re-adjusted and the average homeowner will see a 24% increase in their tax bill. But the state is going to send us a rebate check of about 8% of our taxes. ??????

You're not watching enough TV Brian or you would have SEEN the dumb down in progress.  How many nights a week is professional wrestling on now? Desparate Housewives, AMERICAN IDOL that draws more voters than national elections, Swapping wives (meet your new mommy), then look at some of these families on shows like Nanny 911.  The dumbing down effect is all around us.

Our TV is very likely to be on the History Channel, HGTV or Discovery than anywhere (except the kids like Nick and Disney) so we don't watch much of anything on regular tv, although we like HOUSE but I've thought for a long time that television programming was a government plan to pacify the masses...

How much TV do you think Bill Gates watches? Donald Trump? Ted Turner?  

People are NEVER TAUGHT how to handle money...why?  Would it be so bad to TEACH people that we don't BUY that which we can not PAY for and when we DO need to borrow to BUY something, it had better be a house, a reasonable house and one that will not take more than 25% of our take home pay every month.  But that's not the public schools agenda (that lies in getting students the tools to pass these "competency exams")  nor is it the college agenda (which appears to be mostly political in nature).

Wealthiest nation on earth?  Nah, just the most IN DEBT nation on earth...

Good points Ron,

How much TV do those people watch. I have a feeling The Donald won't even watch his own show!

If they got in for 0% down, they had nothing much to lose.

I know, I wouldn't do it, knowing I couldn't afford it later, but many people think they will jump in now and figure it out later. If they had had to plunk down 10% or 20%, they would have made a more serious consideration, maybe.

Well, you all make good points but how many of you worked in the mortgage banking?  I did before crossing over into the real estate side.  There are many and I mean many different programs for people to get involved with to purchase there investments.  There is one problem in the mortgage industry and that is there is NO classes required, final exam, post continuing education and renewal of your license to become a Loan Officer.  As long as you graduated from high school and can pick up the phone and talk numbers you can be a Loan Officer.  When I became a REALTOR I had to go through school all over again and now I have licensing in Virginia and West Virginia, my GRI and ABR Designations - a lot of time in school to get were I am in this career.  What I am trying to say is people need to be educated on MONEY, how to borrow it, how to use it and how to save it.  It were this begins is at home, high school then the universities.  But I think it has failed at home.  Turn the TV off and spend time with your kids and TEACH them and don't rely on some one else.  

Don, you have it right with ONE exception...we must teach our kids but our schools must also play a part.  

Kids DON'T listen to parents!  But if we teach it and it's reinforced in the schools, then yeah, I think they would get it...but heck, who am I kidding,  the schools teach a class called economics and don't even bother to teach kids how to balance a checkbook!

So what are you guys saying? I should not enroll in the Trump University On-Line Course?

New buyer qualification questions:  

1. Are you dumb?  Yes: I will refer you to another realtor.

                             No:  Prove it.

2. Are you smart?  Yes:  Prove it

                             No: I will refer you to another realtor.  

I have seen on the news that these poor homeowners were talked into something that they didn't understand and it is the lenders fault for not explaining. How hard is it to explain the words ADJUSTABLE RATE,  FIXED RATE FOR 2 YEARS ( ETC). Simple english to me. Adjustable rate telss me that my rate will change (no brainer) and Fixed for X# of years tells me I have a fixed rate for x# of years and that it will change. These re-fi people have a 72 hr right of recission and let alone it takes 2 weeks minimum for the most part to close a loan. I'm sorry, but I just get tired of people putting the blame on everyone else. Granted there probably were some that were lied to, but come on. Ignorance of the law is not justified, it should not be justified here either. I feel people thought the market was going to still go up, dispite everyone and their grandmother said the market was going to top out, and they thought they could cash in and sell their home. It is like the stock market, they just bought at the wrong time. May sound heartless, but too bad. It doesn't take brains to understand ADJUSTABLE RATE MORTGAGE. (Go ahead, bash me now for being insincere). Just my opinion.

My point exactly. My lenders and myself all disclose the facts especially on a type of loan like this. We can only do so much. They see the beautiful house and look at the immediate satisfaction, disregarding the future consiquences.

I think Rob made some very good points. Do you remember the movie, Wall Street, "Greed is good" from a different speculative era? I think there was more careless lending to investors/speculators than to buyers who planned to live in a home that created more of this problem. I truly feel sorry for a home purchaser who didn't understand what he/she signed for and is in financial hot water today but in most cases, it was explained, in many cases, it was chosen to be ignored.

By the way, my wife loves American Idol (which I refer to as stupid TV), I watch the Weather Channel, a few things I can learn something from (like Ron) and selected sports (I was glued to the NFL draft on Saturday and all the subsequent analysis).

Ok, ok, ya got me Howard, I'm an occasional fan of most sports but a football fanatic...I also "watched" the draft on sunday.  Caught parts of it Saturday but was in and out a lot with a new listing I took Friday.  Then on Sunday it was on in the background while I painted the baby's nursery...no rest for the wicked...

Here is my stock answer to anyone who asks me what I think might happen to real estate prices in the future.

"Real estate has appreciated 5.4% annually "on average" for the past 20 years.  If you expect a greater return than that, it's pure speculation on your part.  And since real estate is a market, like any other commodity, real estate prices may also go down".

Naturally, that's not going to stop someone from buying a 400K house on a 50K salary, no more than it stops someone from leasing a 5-series BMW when their bank account is drier than a ham bone - but at least I sleep well at night.

Ron, I would rather have taken a good listing and sold a home but in lieu of that, I watched the draft.