So the govt. passed a law saying the minimum payment had to be higher (4% now?)

Um, not a law, technically. More like informal pressure from the regulators, based on the reasoning that credit card debt is revolving debt which should, well, revolve. Which, incidentally, got criticized in the media because not all cardholders could handle the higher payments.

I suspect another factor in the mortgage mess is that mortgages got a lot more complicated in the last few years. Option ARMs, Interest Only, and the like didn't really exist 5-10 years ago. Plus a culture that says owning your own home is one of the fundamental elements of success. Even ARMs only came into being 25-30 or so years ago.

Isn't that what having a lawyer is for? I mean, I'm sure I don't understand the whole dealio, never having done it myself, but that's why you have agents to represent you and stuff, right?

People using subprime loans don't have the money for a lawyer. They have to hope their Realtor and loan officer are ethical.

(My risk-comfort, for mortgages, is something akin to the old "my income 3x". I told this to my now-condo-owning Flatmate, and she said, three weeks before the current crisis, "Oh, that's outdated now. You can borrow more than that.")

Lenders use front and back end debt to income ratios to qualify someone for a mortgage. It tells them how much your maximum house payment can be. 38 is a pretty comfortable ratio. Any higher and you'd better have stellar credit and payment history and your current housing payment should be more than your mortgage payment would be.

We didn't have a lawyer, but we did read every piece of the zillion pieces of paper a million times. Luckily, our mortage broker was a high school friend of a friend and when we said Fixed Rate and here's our limit, got us that loan, even though the ARM loans had lower interest rates.

For $500 a month that car had better give good road head while I'm listening to my books on tapes on the long drives

looks at my 2006 Honda Civic. looks at my latest payment statement of $507 from Honda Finance. looks back at my Civic--nope, still no provisions of oral sex. looks into refinancing with my bank since my credit rating has improved since buying the car.

Who's the dummy with the $1200/mo. car payment that averages out with my old $100/mo. one?

points to former clients at BMW dealership in LA.

They have to hope their Realtor and loan officer are ethical.

And I'll bet a lot don't know that most real estate agents represent the seller and not the buyer.

I must admit that I get a kick out of the letters we get regularly telling us how we can refinance to get this great low rate -- which is about 0.50% higher than the rate we now pay on our 30-year fixed.

He nationally syndicated?

If you look down the right-hand side column here: [link] you can get a whole list of stations that carry him and when, and links to stream them.

His book, The Total Money Makeover is pretty basic, but it has good charts in the back for budgeting. I think you can also access them on his website, but I did need the book to figure out exactly what he meant by the "debt snowball" for example.

When I lived in CO, our real estate agent was allowed to perform the duties a lawyer might normally do, although I still had a lawyer (not me!) there. A title company handled that closing.

When we closed on our house in NC, a lawyer does the actual closing, but I triple checked that she was representing us, and not both parties, or something like that. [eta: I wrote this before seeing Fred's comment, but I'm curious why the buyer wouldn't have their own agent. When we sold our NC home, the buyer's agent was another agent from our agent's company and I had to sign extra paperwork to okay that, after a very detailed and specific warning from our realtor about the risks involved.]

Do people buy houses with at least real estate agents? I think our agent in CO was crucial towards steering us towards a reputable mortgage company.

Who's the dummy with the $1200/mo. car payment that averages out with my old $100/mo. one? I mean, I bought a used car and everything, but -- WTF?

Maybe the average is for new cars?

I think the average new car goes for $20-25K (too lazy to google now) so the average car payment of $484/month makes sense to me. I was paying $300/month for my cheap new car....

We went with an agent (and we made sure she was a buyer-broker, so represented us) for our first condo. She steered us in the right directions -- in fact, the lawyer that handled the closing also prepared our wills.

When we moved up a few years ago, we bought a new home and so dealt with the builder directly.