Ugh, Sophia! I hate it when things like that happen.

We're just starting to poke our nose into the housing market, because if the inheritance I've talked about in Bitches comes through, we will probably be in a good position to buy when our current lease is up. (Still nothing certain, though. Have I ever mentioned how much I hate uncertainty? Because I hate it A LOT right now.) The housing market hasn't collapsed in Seattle the way it has in so many other places, but we're still thinking our financial difficulties of the last 7 years or so making us unable to buy before may turn out to be a blessing in disguise, because there suddenly are quite a few decent houses in our price range on the market. Though it looks like we may have to make a trade-off between "wonderful house" and "wonderful neighborhood."

It just feels like a perfect storm of economic badness between the real estate bubble bursting and gas prices/general inflation. They're really feeling the bust where my mom lives because on top of everything else, living in the country 30 miles from Birmingham is no longer looking like such a wonderful idea, when most of your commute is the stop-and-go gas-guzzling nightmare of US 280.

Given that I have so little understanding of it all, this may be callous...but seriously, if you're poor and have a rocky employment history, you know you can't afford a half million dollar home. Sure, I'll leave a bit of room for being told that you absolutely can and desperately wanting a piece of the pie.

I'm wondering where the sense of personal responsibility is in this.

The flip-side of that is you have a thin grasp of economics and are easily convinced by an expert who spins or flat-out lies because they're taking no risk by giving you that mortgage.

I spent most of 2003-2004 listening to friends and relatives telling me I should buy. Why rent when mortgages are so easy to get? But, my credit rating was crap, I had no savings at all for a down payment or a housing emergency, and I didn't want to lock myself into buying when my working situation could change at any time.

I'm so glad I didn't listen, otherwise, I might be living in one of those tent cities I saw on BBC America news.

Susan, just from what I've been reading on various economic/housing blogs, I'd hold off on buying for at least a year, and then see what the market is doing in Seattle. The foreclosures are just starting to happen now--many of the ARM mortgages haven't even reset yet. When they do, the foreclosure rate is going to skyrocket even more than it is already.

Bah. There's too much stuff to look at as I try to find articles I've read over the last month or so....

FBI probes Countrywide for possible fraud

...

Though the Federal Bureau of Investigation has acknowledged ongoing investigations related to the subprime debacle, neither the FBI nor the Justice Department would comment on the specific targets.

"The FBI has been investigating potential fraud in the mortgage/sub-prime lending industry, however, we can not confirm or deny which companies are under investigation," said FBI spokesman Richard Kolko.

A law enforcement official told CNN that there are currently 16 companies being investigated.

It'll probably be a while before these investigations result in convictions, if any....

Susan, just from what I've been reading on various economic/housing blogs, I'd hold off on buying for at least a year, and then see what the market is doing in Seattle. The foreclosures are just starting to happen now--many of the ARM mortgages haven't even reset yet. When they do, the foreclosure rate is going to skyrocket even more than it is already.

Then again, it depends on where you live. In Michigan right now, my boss is picking up forclosed apartment homes that were purchased or refinanced two years ago between $200k and $350k. He's getting them now for no more than $72k.

oh, scrappy. much ma for you, your niece, and your family.

This is interesting....

Predatory Lenders' Partner in Crime

Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

I tend to be very conservative with my finances and I've had to be more so the past year or so. A couple of years ago I talked to a mortgage broker, one a friend had used to buy a place. I really wanted to buy my own place, I had a down payment, I'd been working on keeping my credit history clean. The guy tried to talk me into a no-down-payment ARM ... actually TWO ARMs, one for the down payment and one for the rest. I looked at the numbers and just said no. He ran the numbers on what I could afford on a fixed-rate mortgage ... which, in DC, worked out to either a broom closet in a nice place or a big place next to an open-air drug market. So ... I'm still renting. But I don't regret that I didn't buy into the whole thing.

The flip-side of that is you have a thin grasp of economics and are easily convinced by an expert who spins or flat-out lies because they're taking no risk by giving you that mortgage.

Yup. Heck, I have no idea what I could afford, house-wise, or what would be a good idea for me to afford. Obviously I'd make an effort to find out if I wanted to buy one, but many people might not really have anyone to ask!

I have no idea how my mortgage broker managed to get us the rate she did on our fixed-rate mortgage, but I feel like I should send her a thank-you note. In retrospect, she was really amazingly helpful.