>>>>><snip>
>>>>>
>>>>>>>>You take the easiest way. Your imaginary 'idiots' gave loans out becuase doing otherwise they would be immediately subjected to 'discrimation' accusations.
>>>>>>>
>>>>>>>No, they wouldn't. There are long-established standards for who's eligible for a mortgage. Lenders chose to violate those and they got burned.
>>>>>>
>>>>>>Long-established standards? Do you mean business practice or government-mandated rules, or both? Would you admit that those 'standards' get changed with time, so 'long-established' adjective is pretty much meaningless?
>>>>>
>>>>>Both actually. Yes, the standards evolve, but this wasn't evolution, it was revolution, with all kinds of people who would never have qualified for a loan (or a loan of the relevant size) being suddenly available to get them.
>>>>>
>>>>>>
>>>>>>>
>>>>>>>>By the way, you could be the first to say it. Real idiots were those who took loans they could not afford.
>>>>>>>
>>>>>>>This one is harder. I think some of these people knew what they were doing, while others accepted the judgment of an "expert" (the mortgage broker) who told them they could afford it.
>>>>>>>
>>>>>>>And, of course, a lot of people got sucked into the "housing prices will always go up" bubble.
>>>>>>>
>>>>>>>Tamar
>>>>>>
>>>>>>I don't appreciate you cutting off the last sentence of my previous reply. You may not like it but it contained the answer to what you write here. Nothing forces people to take gamble as much as knowing that big, bleeding-heart government will bail them out.
>>>>>
>>>>>Sorry, I kept what I responded to. I do a lot of snipping because I hate dealing with these enormous messages, where you scroll down two or three pages to find one new sentence at the bottom.
>>>>>
>>>>>I disagree that the homebuyers thought there'd be a government bailout. I don't think they thought they'd need one. Prices would just keep climbing and they'd resell and make a ton of money.
>>>>>
>>>>>Tamar
>>>>
>>>>Would you agree that current bailout will help to foster 'safer feelings' in future homebuyers?
>>>
>>>PMJI but I don't. I think one of the blessings of the current housing market is that a lot of people have lost the illusion that real estate is a safe, always rising market. You and I know better but a lot of people didn't.
>>
>>Do you mean that they know it now? There is another point of view, exemplified in the same thread, by the way, that people never learn. Could it go together, i.e can people forget about bailouts and still believe in housing market?
>
>I think it would take an exceptional class of idiot to miss the current lessons. Not that it can't be done, we've proven that before ;-(

It depends what is the 'lesson'. One may assume that foreclosure experience could constitute one. However, what if foreclosure is avoided? Some adjustable-rate and/or interest only mortgages look very attractive. I seriously considered to take one not so much time ago. What if someone takes adjustable mortgage, pays 2% for 3 years, and then government comes out and his mortgage, 10% now, gets refinanced at 6% 30-year fixed? Is it a lesson?