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Greg Kratz: How much should greedy house-flippers suffer?

well first of all it wasn't the people fliping or selling the houses it was the lenders loaning more on property than it was really worth. lenders were loaning upwards of 103% of the value with no down payment. then they were adding all types of contract fees so really they were even financing all the extras also So a home of say 100,000 would have a loan balance of 125,000. well u say that doesnt seem that much well maybe not on just 1 loan but they made thousands of these loans to people on stated incomes. whitch means i tell u what my salery is and you take it at my word. and these people never figured in the cost of home ownership such as upkeep repairs taxes home owners insurance these were all after the fact.so dont say it is the people selling or fliping houses because that is as far from the truth as it gets Do u know how important this job is to remodel older houses so to keep communitys occupied.I have personally taken eye sores in a city and changed the area by reviving some of them.

Unwise mortgage lending was part of the problem. However, there were many who misrepresented their position when making mortgage loan request. Many requested multiple loans at different institutions indicating that each house was to be "their" primary residence. It seems difficult to me to keep your present residence and live in one or more additional homes at the same time on a 60-80k salary or wages. When the times got tough rather than step up and and work to resolve the problem, they have walked away from their responsibility assuming the lender can afford the loss. We all end up paying for their reckless greed in many different ways. What happened to honesty, responsibility and integrity?

This sounds like a personal sore spot for Aaron. Too bad. He definitely misinterpreted your statement. I have never been able to afford a home. I am the mom of 4 and my husband and I once owned a condo we were inspired to sell just before my husband had an accident and was unable to work for a year. We lived there 3 years -- the extent of our lifetime home ownership.

My grandfather made a lot of money "flipping" homes in his early retirement. He also helped a lot of people who may not have been able to afford homes by financing them himself and forgiving much. I don't resent what he did, even though my family lives (once again) with my parents. Had my grandfather lived much longer, the family would have had to use the equity in his home to support him and G-ma, who lived until they were each 90 and died just this year. They even provided their own retirement, living for decades off their interest, until the economy tanked and old age ate their principal.

yes I agree it was all about the mortgage businesses and appraisers that ruined this with their kick back comissions. I personally think we should make all appraisers work for banks, not independently.

I agree that this economic slide was perfect timing and made people think about saving money and buying things with cash and not credit.

People's net worth is horrendous!
Now its time to teach our politicians to pay things with cash, not credit!

they were called liar loans because house-flippers lied on their applications. they all said on their applications that the house was going to be their primary residence. They never intended to live in it; heck, most never even saw it. They put their name on a contract to buy a house from across the country while it was being built in anticipation of it being worth more and selling it when it was built.

The lying flippers couldn't have done it without the greedy lenders, and the greedy lenders couldn't have done it without the lying flippers.

"Oh what a tangled web we weave when we endeavor to deceive."

Blaming lenders, Ha! Where, might I ask, does the responsibility of the buyers come in?

I wrote the original email about reverse mortgages that started this. Let me say first that I have lived in this home for almost 30 years and raised 4 children here. My ex and I never bought a house with the intention of "flipping" it. There probably was no such thing in 1980. At any rate, because my home is fully paid for, it is my main asset, and may have to help pay for my retirement because I simply won't have the funds from anywhere else. That said, I know the emailer Greg wrote about wasn't really talking about my situation, but I have to agree that that some lenders were greedy. My daughter's friend and her husband bought a home about 10 years ago, and they have a very limited income. When the lender told them that they could buy a big expensive home, they said "No". They instead bought a smaller, older home in an inexpensive location because they knew they could never pay back what the lenders wanted to give them. Too bad so many other people were either greedy or taken in by the lenders who told them everything would be okay.