










II. Editorial: Business as Usual in Washington, D.C.






Source: ABC News

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By Master Kenobi (blog) on 10/4/2011 11:18:38 AM , Rating: 2
Interest was artificially low, when the rates started to rise nobody could pay them. But that is purely a case for poor loan criteria. It generally isn't a good idea to loan someone the money for a 400k dollar house when they only make a measley 35k. The general premise was a "get rich quick" scheme. If you bought the house and made just 1-2 payments and then proceeded to flip it (sell it to someone else for 10-15% more than you paid) then overall you could make a tidy profit. The problem is the people who did this for 2-3 years and go out while it was still good made out like bandits. All the idiots who jumped on that band wagon later on and kept at it like crack addicts still held homes they couldn't pay for when everything imploded. General rule of thumb, if "everyone is starting to do it" then the jig is up and it is time to run like hell in the opposite direction. I remember my co-workers getting their realtor licenses in droves just to speed the process up and cut out middlemen so they could flip more homes quicker. To my amusement they all got burned when shit hit the fan.

