During the past several years I have seen real estate sales to folks, who in prior times, could never have qualified for a mortgage. There were programs for just about any situation - first time home buyers with no bank account or money even for closing costs - everything rolled into the note. Programs for various careers such as teachers or peace officers - again with little or no financial requirements. Everyone made money - lenders, mortgage brokers, and yes me the real estate broker. The FHA saw a deep decline in loans because they were no longer the "bad paper" guys. Today the title companies are being flooded with FHA closings because that is where you go if the financials are a bit scary.

On top of all that the lenders were allowed to market the ARMs to folks who spent way to much money for their house trying to keep up with thier friends. These people knew better and are not the illiterate in our society - many are professional types with very good educations.

Then the real killer - Fannie Mae and Freddie Mac softened the requierments - and they were the major buyers of packaged loans. The rest is history as they say.

Wow, I really go windy on this thread. Again, I hope all here do well and as I often discuss with my wife - it is not really important what happens - it is only important that we all learn to cope with the cirmunstances and survive until it gets back to normal.

Hammer