Five refi's since '97?
Wow.

Never use your home's equity to pay off unsecured consumer debt. Sure, mortgage or home loan interest is tax deductible and usually much lower APR but if the sh:t hits the fan (like in this example), I'd rather get my unsecured debt discharged in bankruptcy court (which usually can't take your primary shelter) than lose the house through foreclosure...

It seems to me that this family was attacked by two cancers, one of them caused by nature and one that exists due to poor government regulation.

Government regulation has nothing to do with the fact that these people are living way above their income. They pay over $100 a month for cable and now they pay $50 a month for voice lessons. Heaven knows what other expenses they have that are not necessary to keep a roof over their head and food on the table. I bet they kept on spending all through the wife's medical crisis. They have made bad decisions in the past and are continuing to make more. The government can't do anything about that.

clemrick: "The government can't do anything about that."

Nor are they apparently interested in doing so..after all, but for all of the bad judgement folks....and of course the lions share who were out and out duped in one way or another...how in the world would "the governments" main financiers of their various self serving/enriching political games agendas have walked off and profited by billions?

If all of us were very bright..not at all gullible..and paragons of good judgement...the powers that be would simply find yet another way to bilk the system...and leave us holding the bag.

Case in point...the higher the fuel efficiency rises on vehicles..so will the cost of fuel.

IMO...the real blinders are attached to those who are extremely bright..who possess good judgement..but consistenlty fail to see the forest for the trees.

Unlike the less blessed in terms of intelligence and judgement, they have zero excuse.

As the saying goes, the people get the government that they deserve.

Forgot to point out..although Mr. Salamone was being honest Abe, fraught with the expenses of life threatneing illness and pay cuts, the unconscionable lenders were apparently anything but...

Â

"....Meanwhile, "I was getting literally three dozen calls a week" from brokers and lenders offering new deals.

The latest refinancing, for $425,000, occurred in August 2006 through Mortgage Lenders Network, which went bankrupt six months later.

That loan was not big enough to pay all the credit cards and Frank's car loan, as they had hoped. Despite all the refinancings, the Salamones still have $53,000 in credit-card debt, including $30,000 on accounts at American Express.

Help with the mortgage might be coming. A Philadelphia lawyer, Robert P. Cocco, said he found a violation of the federal Truth in Lending Act in the Salamones' loan documentation and sent a letter this month to the current servicer, Wilshire Credit Corp., demanding that the loan be rescinded. The originator misstated the annual percentage rate as 10.3 percent rather than the actual 10.6 percent, according to Cocco.

Adjustable-rate mortgages, Cocco said, "are so complicated and they shoveled them out the door so quickly to investors that it was difficult even for the lenders themselves to accurately calculate and then disclose the costs of the loan."

Â

"It seems to me that this family was attacked by two cancers, one of them caused by nature and one that exists due to poor government regulation."

So your solution is to get the government's permission every time someone wants to refinance? Would this process be executed with the accuracy of the Post Office or with the efficiency of FEMA? Maybe the simplicity of the IRS? What about the effectiveness of the EPA? Or maybe it can be put together with $10,000 hammers that the DoD buys...

Point is, government regulation should be a last resort - like when responsible people get bitten by bad lenders. Self-admitted irresponsible people getting pinched does not constitute a dire situation.

IMO...the real blinders are attached to those who are extremely bright..who possess good judgement..but consistenlty fail to see the forest for the trees.

Unlike the less blessed in terms of intelligence and judgement, they have zero excuse.

As the saying goes, the people get the government that they deserve.

and those people are...
all who disagree with your POV

Even when a person admits it was HIS fault, Logic finds a way to turn the tables and blame the industry..ROFLMAO...

Ad hominem
From Wikipedia, the free encyclopedia

"An ad hominem argument, also known as argumentum ad hominem (Latin: "argument to the man", "argument against the man") consists of replying to an argument or factual claim by attacking or appealing to a characteristic or belief of the person making the argument or claim, rather than by addressing the substance of the argument or producing evidence against the claim. The process of proving or disproving the claim is thereby subverted, and the argumentum ad hominem works to change the subject.

It is most commonly used to refer specifically to the ad hominem abusive, or argumentum ad personam, which consists of criticizing or personally attacking an argument's proponent in an attempt to discredit that argument..."

"They pay over $100 a month for cable and now they pay $50 a month for voice lessons"

A couple who both work started off with a 123,000 loan.
Cancer, medical bills. I feel sorry for the guy.

Forget the Latin lesson, he ADMITTED he was at fault, but alas it is the "industry" to blame..and to second what marys1000 said, i also feel sorry for his predicament,but won't blame the industry...

"i also feel sorry for his predicament,but won't blame the industry..."

Me three, and even if the industry were to blame, over-regulation can be worse than the original problem. Looking at what I wrote above I came on a bit strong. I concede that regulation has its place, but there needs to be a careful balance between over-regulation and under-regulation. Typically Congress errs with too much regulation too late. I think moving in baby steps would be better, even if still too late. Yes, that's closing the barn door after the horses are gone, but that's how government works.

I suspect there is a certain amount of greed on both sides of the subprime industry.

I remember being shocked, shocked! years ago to see advertisements for "debt consolidation" loans, which featured actors saying they hadn't had enough money to pay their bills, but since working with the *** company, they could pay off their credit cards and had enough left over to buy this inground pool! It was a couple years later that a person wrote to Dear Abby to warn her readers that this was actually a second mortgage on their home.

I personally know a couple who 1) lied on their application to buy a house their daughters liked, (but they couldn't afford) 2)took out a second mortgage to add an apartment onto the house, to generate income to cover the gap, 3)put the rest of their "dispoable" income into MLM get rich quick schemes, (several of them) to get rich quick.

The concept of giving up anything, or not trying to keep up with the Jones, was lost on them. I'm with the originator of the Tightwad Gazette: IMHO, the litmus test is cable TV. You're serious about your financial solvency if you're willing to give that up. Heresy, I know, but some of us grew up before cable was ubiquitious, and we actually lived with rabbit ears and three or four channels. I can even see giving the child voice lessons, if she hs promise.

I do agree that some government actions have made this worse. Not by lack of regulation, though. In our state, there is a program to help people become first-time home buyers. I remember my FIL commenting that the program did so much of the calculating and budgeting for the applicants, and allowed them to buy with no or very little down, that they were sheilded from the financial realities of home ownership. They were in no way prepared to make financial choices once they were in the home, and many have been forclosed upon.

I like that he's owning up to his bad decisions, though of course bad luck had *some* part. Still, it sounds like he realizes that he walked himself out on a limb w/ no safety net--and the branch broke.

Other people have similar disasters, but they don't lose their houses (or almost lose them) because they have not gone so far out on the limb, or they have a safety net.

But it really scares me for our economy when you read of all the people chasing him AFTER he'd already taken out loans. it just has this whiff of con men who've found a willing mark.

talley sue nyc: "But it really scares me for our economy when you read of all the people chasing him AFTER he'd already taken out loans. it just has this whiff of con men who've found a willing mark."

Agreed. This man used VERY poor judgment...but, if his wife had not become ill, then subsequently out of work for 18 monthsÂ..and even though insured, incurred 10K in med bills that are not coveredÂÂand had not had to take a 10% salary cut...his financial pickle would not be as severe.

That said...if all those who currently have normal mortgages that they can afford suddenly experience job loss and/or a expensive life threatening illness in the family, many would be in the same boatÂ..struggling to keep their home.

If one makes all their decisions based upon the possible disasters that could occur to disrupt income, few if any would own a home.

Granted, Mr. Salamone should have been far more responsible at the get go...but, even many of those who were responsible in their borrowing for a home have found themselves in the same boat none the less.....with overly avaricious lenders just waiting to pounce and take advantage of their misfortuneÂ.knowing that the more sub-prime the loan, the bigger the payoff from investor land.

I guess the days when it was considered cruel and inhuman to kick another when they are down are long gone...as long as there is a buck to be made.

An ad hominem argument - you mean trolling! LOL...

Come on - did you read the entire article? All their medical and employment problems aside, the Salomones used their home as a tool to borrow as much money as possible, and they have nothing to show for it except debt they will never be able to repay. Salamone and his ilk can sit there and play the "I'm stupid" card all he wants - I ain't buying it.

gina w: "Salamone and his ilk can sit there and play the "I'm stupid" card all he wants - I ain't buying it."

Not exactly a big surprise.

Salamone is not playing the "I'm stupid" card--wasn't that qdog's point?

That he knows what got him into this mess? And now you're implying that he's playing the "I'm stupid" card?

I am not condoning the choices this person made by any *stretch* of the imagination, but I don't think it's accurate to say they have 'nothing to show for it except debt.' The article suggests that they used *some* of the money to pay for home improvements, including an addition, kitchen renovations, etc. Although it seems likely that they are upside-down on the mortgage, I would be curious to know what their house is worth today (vs. just the median prices in their neighborhood)--- in my area, homes that sold for $125K in 1990 could easily be worth $450K today, even in this down market --- especially with an addition and remodeling. If the house hadn't appreciated significantly, I don't see how they could have refinanced for so much.

What? Am I missing something somewhere?

"Cash from the first three refinancings - $160,000 in 1997, $230,000 in 2000 and $360,000 in 2003 - went mostly into home improvements including kitchen repairs, a new roof, a new furnace, vinyl siding, new windows, a new outside staircase, an upstairs addition, and hardwood floors for the living room."

--Am I not reading this correctly - they didn't spend the bulk of the borrowed money on medical bills - it went towards an addition to the home, siding, windows, etc? A lot of things that could have been deferred or just not done.

"Ignorant people like me are what's getting sucked into it."

--That's why I called it the "stupid" card.

to "play the stupid card" is to say, "let me off the hook, I'm stupid."

This guy is saying, "I'm stupid, I did it to myself."

Big difference.

"Am I not reading this correctly - they didn't spend the bulk of the borrowed money on medical bills - it went towards an addition to the home, siding, windows, etc? A lot of things that could have been deferred or just not done."
I'm with Gina, this guy did this to himself. Yes you could point to the illness, but frankly I'm not buying it.

There were something like 3 refi's prior to this. They mention 10K in medical bills and 18 months of work. Lets round that to about 160K just for fun, 10K for medical bills and 150K in salary.

They owed 425K on their loan plus 80K of unsecured debt. That was from those vacations, improvements, cars, voice lessons, and out to dinners. Thats 505K of debt when they started with 123K.

The system was a huge enabler. He's basically a 10 year old in a candy store and ate himself sick, he had no self control.

gina w: ""Ignorant people like me are what's getting sucked into it."

--That's why I called it the "stupid" card.

Hmmmm....gives a whole new twist to "Let he who is without sin cast the first stone".

That said...IMO, chrisk327 has summed up the situation very succinctly "The system was a huge enabler. He's basically a 10 year old in a candy store and ate himself sick, he had no self control."

I'm with Gina, this guy did this to himself.

You are also, apparently, with the guy himself. he didn't ask you to "buy it."

He has SAID, he was stupid.

He had plenty of encouragement, though, and that's bothers me. Esp. because it came from the very forces that many people assume willl serve as a check.

Being concerned about those forces in our economy doesn't mean I'm blind to his stupidity (and HE ISN"T BLIND TO HIS OWN STUPIDITY!)

My question is, should we set up a system that saves people from their own stupidity?

Who am I to say that this guy shouldn't have gotten his loan? he was living a lifestyle above his means, but it may not have looked that way on paper.

Also, if it were you who were working yourself to death, with your wife out of work and hospital bills mounting, what if I told you that you were a bad credit risk, sorry even though your house had the equity, maybe you had decent income and could support it if you didn't spend lavishly.

He's not a 10 year old, he should have known better, so should his banker, but the flipside is a bunch of upstanding responsible people will be renters because it will be difficult to show that much of a differnece between him and them.

chrisk327: "My question is, should we set up a system that saves people from their own stupidity?"

Hello??? They already exist...in vast numbers...with Consumer Affairs being but one...

...and, you apparently are unaware of the fact that up until about the year 2000 or so, the lending industry DID have a system in place...whereas it was extremely difficult for one to borrow unless they could prove they had the means by which to pay...and whereas almost all buyers were required to fork over a down payment...that was not financed by another loan..

What a concept.

That said...I read now that in CA, Fl and a few other states lenders will no longer lend unless the buyer has a minimum of 10% down....if they had just continued that practice all along, the problems we are seeing now would be minimal at best.

Last but not least...focus on the big pictureÂ...this is not about saving people from their own stupidityÂÂ.it is about saving the rest of the people from those who prey upon those who are not the brightest bulbs in the bunch, in order that the rest of usÂÂand the economy..... not get screwed to the point where you, I and everyone else gets to pay 100% for the billions sucked from the system by the predators.

The inherently stupid will always exist..as will those who may not be stupid...but have poor judgement; you canÂt make them smarter, or increase their judgement skills by complaining about their existenceÂÂ.but you can make it very difficult for those who are far, far more intelligent to screw them overÂ...at a cost to us all.

The inherently stupid will always exist..as will those who may not be stupid...but have poor judgement; you canÂt make them smarter, or increase their judgement skills by complaining about their existenceÂÂ.but you can make it very difficult for those who are far, far more intelligent to screw them overÂ...at a cost to us all.

This is an important point. And it's the one I'm mad about.

"up until about the year 2000 or so, the lending industry DID have a system in place...whereas it was extremely difficult for one to borrow unless they could prove they had the means by which to pay...and whereas almost all buyers were required to fork over a down payment...that was not financed by another loan"

That's not the same. The point of that practice was to protect the lender because they couldn't count on the underlying asset to "always" rise in value. Once the lenders convinced themselves that housing always rises in value, there was no need to prove the borrower could repay the loan.

Chrisk's question is more like asking if there should be handholding specifically in place to provide fiduciary duty upon the lender to look out for the borrower's best interests as well. This is well-worn territory for this forum, especially between myself and tricae (who's objections to fiduciary duty were of a practical nature, not theoretical.)

mfbenson: "Once the lenders convinced themselves that housing always rises in value, there was no need to prove the borrower could repay the loan."

And apparently they believed in Santa and the tooth fairy as well...

In reality, any lender who actually believed such would have to have been beyond stupidÂÂ.they would have to have been out and out delusionalÂ.or, absolutely incompetent, in that they were utterly clueless about the vagaries of the RE market, and should therefore never have been entrusted to loan money.

That said, since IMO, chances are that most (if not all) were and are neither...such an assumption on their part was entirely without foundation.

That saidÂÂwhat does that leave in terms of their reasoning in their decision making process?

As the expression goes, follow the $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

"any lender who actually believed such would have to have been beyond stupid"

Ok, I left out an important step. The lenders knew they could securitize their loans in the secondary market, and the secondary market is based on the national market, not a local market. The belief was that the national market would never go down, and there is factual data to back up that belief. It stagnated in the early 80's and again in the early 90's, but its never had anything more than teensy less than 1% drops before recovering again the very next month, and the nationwide 8% drop and counting is completely unprecedented.

A lot of otherwise "smart" people talked themselves into taking more risk than they should. And before you pile this all onto the secondary market and wall street, take a moment to consider all the home purchasers who bought, thinking it was a sure thing they could sell for more later. That includes just about everyone, probably even you and I.

Here is a link that might be useful: There's never been a drop this bad

I agree that the lending industry was incredibly stupid and actually did believe that house prices would continue to rise indefinitely. Also with mbenson's point that securitization of mortgages and bundling them up for investors played a crucial role in the whole fiasco.

The mortgage industry got caught up in a feeding frenzy and chose to turn a blind eye to what would inevitably happen when this house of cards started to tumble. These kinds of speculative frenzies happen in the economy quite frequently (look at the dot.com bubble), but those who get caught up in the them don't ever seem to be able to figure out what's really going on because they can't resist the prospect of more and more easy money.

You can't have legions of stupid borrowers without an industry of stupid lenders greedy to service them.

actually did believe that house prices would continue to rise indefinitely.

Or did those individuals just believe that they wouldn't be around to deal w/ the problem if it ever came back?

Also, I mentioned this before, but I'd like to say it again.

there were a lot of messages telling non-home owners that if they didn't get into the market NOW, they might never be able to afford to buy a home.

The folks who don't own a home yet don't have much knowledge of real estate--they're young, for one thing, and they haven't really focused on real estate, etc.

They believed those messages, and that's part of why they were willing to take chances or go along w/ a suggestion to pad their income in order to get their foot in the door.

The link is to the "Investment Tool" websiteÂÂ.but I could not find the above mentioned article.

That said, the drop in RE value is not a stand alone...much of both the unprecedented rise and drastic fall were both caused and facilitated by loans with absurd terms being approved for people who could not pay themÂÂand in most cases, were not even required to document that they could pay themÂ...especially when the reset terms kicked in.

The "great loan give away" meant that an unprecedented number of homes could be "sold"...drastically reducing supply, while drastically ramping up demand....and as the law of supply and demand almost ALWAYS dictates, prices escalate as well.

However, since so many of these homes were purchased with loans that did not have a prayer of being paid, a good portion of existing homes could not longer be classified as collateralÂwhich in turn started the devaluation ..aka, price plunge. Now, throw in the get rich quick ability that securitization brought...and it was "Let the games begin!"

Now...letÂs play for a moment. IF the prices of homes had either remained steadyÂÂ..or appreciated....all that would mean is that owners could borrow even more $$$$...under equally predatory terms.....with both the lenders and the borrowers merely digging themselves in deeper. Can you imagine a one bedroom 40 year old basic condo in an average area going for 10 mil and beyondÂand lenders allowing the owner to continue to borrow against that value?? Exactly when did the lenders say that they would have FINALLY drawn the line?

That said, the fact that there had never been a drop this bad is a pointless fact, if one does not take into account all of the contributing factors that occurred this time around that were not part of any of the previous RE rise and fall cycles. Nothing exists in a vacuumÂ....and to treat it as such is simplistic at best.

Also, realize that during the last RE boom of the '86, (remember when greed was goodÂ..and Michael Milkin & co destroyed Drexel Burnham?) interest rates were very high. Friends who bought in Â84 had a 13% interest rate...we bought in '86Â..at 10.75%...and you could NOT buy in NY without at minimum 10% down...and PMIÂÂ..and the 10% could not come from a loan...either commercial or private. AndÂright before closing, we had to supply all sorts of documentation that our financial picture had not changed in any significant manner.

IMO...any lender who thought that there was or is any comparison and banked on the past rise and fall patterns was again, either stupidÂ...or incompetentÂÂor both.

Last but by no means leastÂÂnot all home values have tankedÂ..many areas have dropped a bitÂ..or remained steady.

It appears as if the areas that have devalued the most are also those where the largest number of predatory loans was issuedÂand that pretty much says it all in terms of cause and effect.

"It appears as if the areas that have devalued the most are also those where the largest number of predatory loans was issuedÂand that pretty much says it all in terms of cause and effect."

I don't think that's true . The areas where prices have fallen the most are mostly the same areas where they rose the fastest -- California, Florida and Las Vegas. Of course, we know that a lot of the spectacular rises in prices these area saw in the early 2000s was driven by speculators.

There certainly was enough predatory lending going on during this period, but I don't think loans to speculators fall in that category. Actually, I'd say that issuing IO and neg amort loans to speculators to buy houses in markets where huge price run-ups had already occurred would have to be considered a remarkably stupid thing for the mortgage industry to do. Yet they did it.

"Or did those individuals just believe that they wouldn't be around to deal w/ the problem if it ever came back?"

No doubt true in some cases. And certainly the industry was tremendously aggressive in pushing loans with very unfavorable terms upon naive borrowers. It was a combination of both short-sighted stupidity and massive greed.

And no checks and balances in the entire industry to prevent it from running out of control.

"but I could not find the above mentioned article."

There wasn't an article, just a graph (if you scroll down) of average and median home prices on a nationwide basis, using US census data. It wiggles up and down with minor fluctuations, and as an overall trend it flattened in the early 80's and again in the early 90's, but then in the late 90's it goes up at a steeper rate (one we now have proven was unsustainable) and then in the most recent data point we are on the beginning of a downward correction, the steepest and most rapid in the entire data set.

"Can you imagine a one bedroom 40 year old basic condo in an average area going for 10 mil and beyondÂand lenders allowing the owner to continue to borrow against that value??"

Yes. It will happen in about the year 3000, when a candy bar costs $500, and the average national income is about $2.5 million a year.

"the fact that there had never been a drop this bad is a pointless fact, if one does not take into account all of the contributing factors that occurred this time around that were not part of any of the previous RE rise and fall cycles. Nothing exists in a vacuumÂ....and to treat it as such is simplistic at best."

I'll take that as a compliment. Making the complicated sound simple is a talent I have. It is a talent lacking in people such as Al Gore.

"any lender who thought that there was or is any comparison and banked on the past rise and fall patterns was again, either stupidÂ...or incompetentÂÂor both"

You just wiped out the entire banking industry, and not just in home loans but all forms of credit. Lenders rely heavily on past patterns - take credit reports for example, which are based on a borrowers' past patterns of behavior. Where the lenders and the lender's investors erred was applying that kind of thinking to the housing market itself - they made the leap from "a drop that size has never happened before" to "a drop that size cannot happen". THAT was the mistake.

"It appears as if the areas that have devalued the most are also those where the largest number of predatory loans was issuedÂand that pretty much says it all in terms of cause and effect."

That is an opinion based on a perception, not a statement of fact. It may be that the areas that had the wildest price increases attracted the most predatory loans after the increase event, and that those same areas are having the biggest decrease due to the unsustainable prices, and predatory loans might have nothing to do with it.

We do not have proof one way or the other.

I think we all agree that the system was too lax and these loans that were being push were not designed for the average buyer, however were pushed on the unsophisticated. Yes, the rest of us shmoes are going to bail them out in some shape manner or form.

The lending system that was in place in 2000 requiring a downpayment of 10% wouldnÂt have stopped this guy, he was refinancing, he could leave 10% cushion in, and still be where he is today, although it would have helped the situation.

Hey, when I was buying a home, it pissed me off that people I knew were financing 100% and their closing costs, and taking financial risks I was unwilling to take, buying a nicer house than I had. Ohh well, that canÂt be helped now, for some it payed off, some it didnÂt.

My problem is, this guy may have been stupid, but he wasn't dumb, he'd been through this before, was in real estate, he epitomizes what I despise about the crisis. He is a middle class guy who got greedy and felt he "deserved" the nice things in life running up debt to pay for it.

chrisk327: "He is a middle class guy who got greedy and felt he "deserved" the nice things in life running up debt to pay for it."

Yes...quite true. Debt has become a way of life for many individuals...as well as most corporations...as well as city, state and federal government.

That said...few have no debt...and many who manage it quite well would not be able to do so faced with illness and income cuts as was the case with this couple.

That said, you appear to have missed the following:

"Their five refinancings since 1997 ran the gamut of the subprime universe, including piggyback loans, no-doc loans and two-year adjustable-rate loans - sometimes known as exploding ARMs."

Even with 10% equity...the medical bills..combined with his wife's absence of income for 18 months as well as his pay cut would have been evident if the other rules were also in place in terms of having to be able to prove that one can afford to pay on the new, refinanced terms.

He admits he is to blame...however that by no means exonerates those who are equally if not more repsonsible....

That said...subprime isanity aside, there are vast numbers of people who are not more than a paychek away from being in the same boat......who may not even own a home...but simply because they wanted to have children...who are probably the next biggest expense...

Many who gradduate from college are saddled with debt in the area of 20K to one hundred thousand or more...and the jobs they land can't begin to allow them to afford to live on their own..

That said...this is a huge problem, created more by a skewed and broken finance systme..then it is by the individuals that get caught in the trap.

The subprime folks are merley the tip of the iceberg.

I agree that the medical bills and wife loss of income had some effect, however based upon the story, only about 10K in medical bills. How much could she possibly earn in 18 months that would have fixed the problem? Yes they might be able to make payments; however, the vast majority of his debt was independent of the medical expenses and her lost income.

There is a problem in our current financial system; however there are other problems you bring up in your comments.

1) Essentially most decent jobs require a higher education. However, most these jobs don't pay fantastic sums of money to offset the cost of that education.

2) Supply and demand have left rents and houses priced to the point that 2 members of a household need to work to support it with little left for savings. One income loss for a few months can be a problem.

3) The consumer mentality that is prevalent puts people in debt.

I know I suffer from some of this myself. We bought a house early at 24 and 25 that takes up a large chunk of our income monthly. ItÂs a starter house but still cost $350K. I renovated the whole house as it hadn't been updated in 40 years, recently doing the kitchen with some extras I probably didn't need.

I've gotten used to buying the things I want, although haven't splurged for the BMW, trips,or the flat panel that my peers have.

As bright and conservative as I am normally, weÂre still only 3 months away from missing a payment if I lose my job. Although thankfully no consumer debt, just home, education and a small car loan.

Good points, Chrisk. Another factor that has been an influence in our area is the significant drop in income for many households.

We have a lot of pilots and engineers locally, myself included. Many of our pilot friends have seen cuts in wages of 40% or so. Engineering jobs have been outsourced, resulting in either unemployment, as in my case, or under-employment. Consequently, people who could easily afford their homes when they originally bought them are now struggling. DH and I were very conservative in our house purchase so we are fine so long as DH keeps his job, but that is not true for everyone.