Recently, the National Association of Realtors (NAR) reported, ...
A record numbers of foreclosures (up 25% year over yera) helped drive down Phoenix AZ real estate more then 30%
It does not matter if you live . Whether you are rich, poor, or live in a different Country, when people lose money they like to point fingers of blame. It is ingrained in us as Americans not to be wrong, so it must always be someone else's fault. 
Today, When it comes to the housing crisis, people are losing much of their net worth; especially in Greater Phoenix and there is some blame to go around.
- Borrowers ? greed and buying more than they could afford?
- Lenders? greed in making money with easy underwriting?
- Banks ? packaging risky loans to Wall Street?
- Wall Street - ? selling pools of risky CMO's (collateralized mortgage obligations) to investors?
- Government -? - lack of regulation ?
A fantastic multi-part history of the Housing Crisis details the Roots of the problem.
A name that is now being talked about who may be the key factor is financial uber-guru and financial world icon, and some say ‘Rock Star' is Alan Greenspan.
Alan Greenspan, Head of the Federal Reserve and maker of monetary policy introduced lax lending standards to halt the inflation of the 1990's bull (stock) market.
After he achieved this goal with great success he was challenged by the dot -com bubble bust in early 2001 and then the tragic events of 9/11. What did he do to stimulate the economy you ask??
After 9/11 he continued to ease lending guidelines (think sub-prime) and more significantly, he started lowering interest rates and lowering interest rates and lowering interest rates.
Under Greenspan the Fed cut rates from 6.5 percent in late 2000 to 1.0 percent in mid-2003.
As interest rates continued to drop and sub-prime and alternative (Alt-A) mortgages became easily available, builders built and buyers bought and investors invested.
The Housing market began to grow in 2001 and boiled until 2005 and grow into the Real estate bubble that burst at the end of July of 2005.
Look at the bright side, Alan Greenspan sees the bottom in housing next year and he cannot be so far off 2 times in a row! Can he??
We are to blame for not demanding accountability, investigations, and indictments from our government.
Jim Crawford - it is always most difficult to admit the fault may very well rest (in large part) to us. And you are right, we may need to stand up and take responisbility or we may never get out of this mess
I am not sure who is to blame, but I know that if our so-called market expert super-genius , financial guru missed this whole thing and didnt see it coming, then no one knows what the Hell is going on
Jason Mitchell -
it is amazing that Alan Greenspan is give so much respect for his so-called financial genius when it could be argued that he is at fault for this whole debacle for his insistence of lack of regulation and lowering interest rates to such low levels
James,
I appreciate that there are individuals that have played "key" role's in the financial issue facing us all.
I believe that we know what needs to be done going forward....lets just keep our eye on that ball.....for all our sake's...
Dan Brudnok -
there are a lot of areas of blame , but , yes, I think you are right , there are a few "Key" individuals that the public relies upon that where sleeping at the well , so to speak
I am not one to point fingers, but , in this case, the public was handed free money, with no real lending requirements, but a pulse, you cannot give people enough rope to hang themselves
Ricard Cortez - the public relies on our leaders. The hands off government of the last 8 years led to great propsperity until a collective greed on all of the parties mentioned led to the implosion of housing , credit and consumer confidence. Three is a lot of blame to go around
Alan Greenspan was partially to blame, however President Clinton and Barry Frank (chairman house banking committee) pushed Fannie and Freddie to issue loans to weak qualifications and assets.
Richard
Richard Stabile -
I should have mentioned Barney Frank who is now such an outspoke critic of the current administration when he in fac t wrote and pushed legislation and encouraged Fannie and Freddie to give away money to anyone and everyone
Interest rates were not the problem. We are at historic low rates right now and it is doing nothing. Easy credit pushed by Clinton administration and then deregulation and lack of oversigth by the Bush Administration are the root of the problem
Primetime - good point about rates. for most people, a drop in interest rates is not signficant enough to make a buying or not buying decision as rates are so low anyway. The problem is cash requirement and nobody has any money.
we have to quit pointing fingers. There probably is an argument to be made for blame on anyone from realtors, to buyers to government, lets put that behind us and start looking at solutions before things get worse
Barbara Romeo - I like your opinion.
At this point , playing the blame game serves little purpose, lets get behind our government to voice your opinion for possible solutions.
Hey Wexy....you forgot to mention the appraisers who lied, stretched or pressed to create a value that was targeted by a contract that was put together.
Larry Bettag - appraisers themselves are not as much the problem as the loose guidelines. I mean , have you ever met an appraisal that couldnt find comps to justify about any price ??
James....Yes, I definitely have seen appraisals come out lower than contract price!
The direction the finger points seems to depend on who that finger is attached to;-) But we need to stay out of the blaming and stay into the solutions.
James - I think everyone of those you have listed as possibly to blame, are partly to blame. I think it's been the collective bad decisions of all those entities, that came together to create the perfect storm we dwell in today!
Debra Kukulski - I agree , we need to focus on solutions. pointing the finger is getting us nowhere. and, appraisals are coming in low, even gettting cut by underwriters it seems, that was not the case from 2001-205
Myrl Jeffcoat - a 'perfect stom' is a great way to put it, and you are right, ... this disaster that has crippled the US and world economy has to be a combination of many factors, and no one person.
When the laws that were enacted after the great depression were relaxed, that was the beginning of the downward spiral. The laws were put in place to protect consumers and banks alike. When people are able to buy with no money down it can only lead to tears. If they cannot manage to live frugally for awhile to save up a deposit, they usually do not have the habit of saving and will not be able to handle the responsibilities that come with home ownership. Self denial before they pay their debts is not usually a strong suit.
Another blog here on AR talked about seeing homeowners telling their story of losing their home and in the background are luxury vehicles (leased of course as they did not save up a deposit to buy one) large screen plasmas (several in the home) etc.
Frugal times are here again. Pay yourself first (savings), when you have some extra money treat yourself and your family, save for your purchases. It is not a badge of honour to hold 18 credit cards, it is a sign of not being able to say no.
Michelle Finnamore - thanks for taking the time to write such a thoughtful and articulate comment. Too many stories of hummers and plasma tv and jet skis and people losing homes they cannot afford as a result of accumulated debt. we are certainly in different times.