I sort of have to wonder about a few things. First of all, are we talking ourselves into more of a recession than necessary? Were not some of the financial institutions a tad greedy with the home sales and foreclosure problems? Did not those institutions look at the possibility of huge profits rather than realistic ability to repay? Did not some individuals decide to purchase homes way out of their ability to pay for? What part did the lending institutions have in this? Looking at many signs around 100 percent financing and that may sell homes but it also can be the reason for foreclosure.

I know that the usual amount that could be borrowed was 80 percent and with a fixed rate of interest. What happened to this and why I really don’t know, but it worked well for many years. Having the home buyers put up 20 percent of the cost of the home tends to make the buyer more aware of their obligations and ability to repay the loan later on. Having a fixed rate rather than variable is more realistic for people than the sucker come on low rate that in time balloons into a huge out of sight interest expense. How many home buyers out there purchased homes way above their ability to repay? How much did the loaning entity do to get those individuals to purchase the home? How much due diligence did the lending institutions do prior to loaning the amount on the home?

Seems to me that a lot of individuals were bamboozled into purchasing homes they could not afford. Those who wanted to sell the homes and those who wanted to lend the money on those homes were less than diligent in their intentions. The Realtors did not get their commissions unless the home sold. The builders did not get their profits until the home was sold. So guess what? Both sides of this part of the equation had vested interests in selling homes. And they did this seemingly without any thought of the person’s ability to repay when the mortgage rates increased.

Many seem to have used the old bait and switch to get people to purchase homes that they could not afford. Then those institutions sold the paper they got from the sales to others for less than they would get if kept until the end of the mortgage. Then, possibly, the paper was again sold to someone else. This, in my opinion, tended to increase the problems by spreading out to almost everyone in the business those bad mortgages. And everything was fine until the interest rate increased.

Getting people to take variable rates by using a very little initial rate was rampant. Many buyers looked at the present payments not the added ones later on. And guess what? When those monthly payments shot way up many defaulted because they would be paying more than they made. Why didn’t the loaners look at this prior to their loans? Greed and make the bottom line look good. Maybe it made the bottom line look good today but it sure did shoot it down in the long run, didn’t it?

I feel there are too many ways for people to mess around with the financial system by selling things such as derivatives, which I do not understand, and other financial services and items that seem to me to be only ways to let someone make money off of others and not do much for it. Are these financial entities needed by our financial system today? Heck, I don’t know, but it seems to me that there are people selling everything from carbon credits to derivatives to promises that the economy will get better. If someone can come up with an idea to sell something to someone with the idea of a fast profit, stand back and watch the herd rush in.

Possibly the financial institutions of the country were not regulated enough or maybe they didn’t regulate themselves when profits were out there for the picking. Or maybe those involved got greedy and then got stung and now want the tax payer to bail them out. I don’t really know, but I can’t help but wonder if we didn’t bring this on ourselves by not watching what the other guy was doing and the other guy getting just a bit greedy. Maybe we, as consumers, need to be much more careful and interested in what we are doing. Maybe we, as consumers, need to live within our means — not borrow to live above our means. And maybe, just maybe, we need to not pay attention to those ads telling us how easy it is to get a home loan to pay off other debts. And maybe we need to look closely at the interest rates charged by the credit cards that are just as onerous as are the variable rate home loans.

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