Sunday, March 25, 2007

The human cost

Subprime bust forces families from homes

Excellent article combining analysis of the subprime market with a story about the Snearys, a hardworking all-American family trapped by debt. To be repeated in the UK soon.

Posted by harold @ 11:13 AM (2150 views)
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2 thoughts on “The human cost

  • japanese uncle says:

    The more I read this sort of literature, the more I am convinced that everything was arranged deliberately, for trapping as many people as possible under the yoke of slavery sponsored by banks, particularly after I learned the intentional creation of the bubble as confessed by Eddie, the betrayor of his own class. I am 120% sure the same dreadful stories will unfold in the British ‘subprime’ market sooner rather than later. Why the heck the Crash Gordon hurriedly created utterly unnecessary, originally redundant public sector jobs in tens of thousands, which he was destined to scrap in a few years time anyway. Enticing the ignorant into the fictitious home ownership with nearly foregone tragic conclusions as in the case of the Sneary’s. WHY?

    I have no sympathy with BTlers wherever on earth, I cannot help feeling some remorse for this family and the six cats.

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  • “The Snearys have a long-term plan, too. In a few years, they hope to buy again. But the next time will be different, Tim and Angela say. They’ll stay within their means. They’ll borrow more intelligently. And they already know just where to find a deal. They’ll make an offer to another family desperate to escape foreclosure.”

    This is the pattern that will cause the downwards spiral in house prices. As more struggle, there will be more foreclosures and more buyers who know the desperation to sell.

    Remember it is very very few houses that need to drop in price at any one time – those currently on the market (around 60 per estate agent). If every FTB buyer who absolutely has to buy refused to put in the asking prices and offered just 20 – 30% lower the sentiment will change and the spiral down will start.

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