Ben Nicolas

Sean, There are alot of dangerous financial products out there that don't cause any harm as long as people don't abuse them. Borrowing more than you can afford to pay back is negligence and abuse. Mortgages really aren't like credit derivative swaps or some kind of foreign rocket science. If you are telling me that people didn't understand the "wildy exotic" 2/28 interest only loan program than I don't know what to say. Its very straight forward, its only fixed for 2 years and you only pay interest, nothing goes towards principle. In the future should the government give homebuyers financial aptitude tests and only allow them to buy a house if they can prove they have a certain financial IQ? For you to say "I don't think personal responsibility is an issue" is pretty amazing. What about the concept of accountability, is that an irrelevant character trait?

Question for person that posed the original question. What does what seller paid have to do with your offer? New York was purchased for a bunch of trinkets by the Dutch a long time ago if I wanted to buy it today would that be relavent to my offer price?

people buy based on over all affordability of available financing packages. There are starting to be homes in the $200-400k price range in certain areas of LA county that most people could affored the payments on. After the tax deduction may even be better off financially then their current rental situation but they don't have the 10-20% down. The entire loan package has to be affordable. Bottomline is that prices need to be in line with peoples real wages. Until prices are in line with the real wages Americans are earning we won't see an end to the price declines or foreclosures. Any gov't intervention will only delay this inevitable reckoning. Ben Nicolas www.ietrealestate.com