What Stockton, Calif. says about the troubled real estate market

Fifty years ago, California was a beautiful and enchanting place to see and to live. Today, because of the crazies it has generated and attracted, it's more like hell to live and work in. All its people with three-digit IQs, moral values and kids they care about, are leaving it and its slime, for natural paradises to the East.

I also feel bad for the people of Stockton. As the article said, the government can't reward people for making stupid choices. As far as not "turning its back on people who deserve to be helped", give me a break. When I lose money on a stock purchase, I don't run to the government and ask for a refund. The government is my tax money and I don't want to pay for people who made stupid decisions.

I can't understand why everyone is being so hard on people that used sub-prime mortgages to get into their dream home. First of all today the majority of us CAN'T afford the median house price! When people start looking they are brainwashed by realtors, mortgage companies, and everyone else that they CAN afford such a home. Most of these people are NOT credit risks like being reported by the media, but just simple hard working middle class people that wanted the dream of owning their own home! They are guilty only in believing the liars they were working with at the time of their purchases! The mortgage companies are the real criminals here! They are preying on people's dreams, especially the young and nieve. But even if you know better you don 't have a chance! Have you applied for any kind of a mortgage lately? These people are schooled in just what to say to all of your questions. A wise person can ask ALL the right questions and still get caught in their lies! Their deceptive practices should be illeagal! Don't blame the purchasers it's not their fault, they just desperately wanted to believe what they were being told. And yes someone has to make this right! It should be the mortgage companies themselves! The government should force them to turn around and offer those same people realistically affordable 30 year fixed mortgages, realistically based on the income of each individual buyer! If it puts them out of business so be it! They gave these loans out knowing that their clients Could'nt afford it and in a booming house market were hoping these people would loose their homes and they would reap the rewards! It's Criminal and these loans should be outlawed immediately! So should their lies! Just for the record I thank God that I am not counted among these poor people, but someone needs to help them! In the end it is effecting us all!

People should not be bailed out of a poor investment.

Remember the context; we have been in a massive boom in residential real estate for some time, and people got swept up. They didn't want to be the only people that didn't participate in this boom.

That's the underlying "problem"; people bought at the tail end of an asset price boom.

Government; don't spend my money bailing out latecomers to this party!

Most of the people in my area jumped on the homeowner bandwagon because the price of homes were going throught the roof! (artificially inflated values) They thought that if they didn't get in when they did, they would never be able to afford a home at all. Now enter the shaddy lenders.. People here bought out of panic and they were also lied too. Isn't it funny how when a homes price is artificially enflated by 60% of what its realistically worth everyone screams when the value falls a mere 20%?!! The home is STILL overvalued!!!
Where I live the median income is 25,000 per year, yet the greedy SOB's here have not lowered the price of these over valued properties. They cry about having to sell a 1500 square foot track home with no upgrades for ONLY 250,000!! The home realistically should sell for 90,000!!!
There are development here that are trying to sell the model homes for the development fully furnished with all upgrades. They would rather see them sit empty that sell them for a price the population here can realistically afford.

"I can't understand why everyone is being so hard on people that used sub-prime mortgages to get into their dream home. First of all today the majority of us CAN'T afford the median house price" - Lisa.

First of all, the reason 'subprime' gets the bad rap is people can subcategorize a group separate from themselves. The truth is...we are all subprime now. Even Harry Macklowe is likely going to lose billions because he was a true believer and bet the farm at the wrong time. The truth is the problem was not subprime...it was stated income and high LTVs.

Finally, look back over history. Do you really think the current situation is normal? Do abnormal situations persist forever? If you can't afford a home because prices are nuts relative to rent, then freaking rent one and take pride in the fact that you are not an idiot!

Why do people (ESPECIALLY you ladies...) seem so intent on joining this magical 'homeowners' club. It is cultural psychosis borne of pure insecurity and a need to fit into the groupthink. I think you all actually believe you are not a success until you own a home.

Owning a home used to be hard....thus it meant something. Any schmuck could 'own' a home in the boom...at least for a while. We guess what...as such...'owning' a home means NOTHING. As soon as you realize this...you can think clearly.

You must be aware of your own emotions, and what causes them. Its called observing ego. When you realize you are falling victim to these types of group manias...you are suddenly free of them.

When I make my $1,900 a month rent payment....on my house on the water (while admiring my ski-boat tied up on the dock out back), I smirk every time...thinking about the guy next door who just dropped $750K for a place lust like the one I rent. With an ammortizing 30 year loan, taxes and HOA fees, etc...he is stroking $5,000+ a month!....and his house is falling in value...FAST. He apparently did not do well in math class.

I will buy a house like his in 2011 for 140 times the monthly rent....probably about $325K....& I will be able to pay CASH.

"They thought that if they didn't get in when they did, they would never be able to afford a home at all." - titianlady

This IS the definition of stupid. Again....history. If Americans in general ever read history books, they would never succumb to this mindless groupthink.