I hope that’s the case I am under 30 and was in college when the dot com blew up so I didn’t pay attention to how things worked. I grew up with not a whole lot maybe our family of 6 saw 40k a few of those years but not many it was very hard.
Now me and my older brother find ourselves well surpassed that lifesytle incomes around 4-5 times that and in some ways we still can’t escape that mentality. Its actually pretty similiar to anyone who went through tough times and is in a better situation. So if that’s not going to be the scenario then I will be happy I am just preparing like anything can happen because that’s the mess this world is in. For now we are doing fine but the collapse of the economy has me worried no doubt about it.

Your comments make it sound like if we have a depression (which seems at least 50% likely at this point), every single person will be unemployed and broke, and the entire nation will be chaos and rioting in the streets or something.

Granted, a depression would be no cakewalk, but I really don’t think it would be the end of the world scenario you seem to be painting it as…

“Bottom line is if we see continued declines it will be over economically and it won’t matter for any of us.”

I think the issue is more complicated than that…keeping people in houses when they are unemployed or under-employed will not save the economy.

Loan modifications are not the solution, you are just kicking the can 1 -2 years down the road.

If you’re about to lose your job, buy a house. Then when you sign up for unemployment, get your loan modified.

No one will be buying or owning if the economy collapses, the collapse crowd better be careful what they wish for. Its getting very ugly out there.

That’s only part of the story. She lost her job and her husband’s construction business is slow. How long will she be able to keep up with payments with no job? Loan modifications don’t mean a “hill of beans” if you’re not working.

I got a feeling this is just the begining of such programs that will be launched, yes the spec properties will be on the market as keys are mailed in but actions will be taken for people who are going to suffer during this crisis. I think there is plenty stacked againstthe 40 – 50% off crowd, if we see that we are really talking depression and it aint going to happen. The govt and lenders are going to do all they can and if it fails…. we all will be up sh#t creek

As far as the loan limits, does it really matter anymore? Its been proven the increase didnt move nay property, its a non issue. The only people buying homes will be those with large down payments.

There is one financing issue that I think will matter more than just about anything else to our local house prices: the ability of airlines to finance new planes. This will have a direct effect on local employment, hence, my assumption that it will impact house prices.

Reinforcing my concern is a current article in Aviation Week that starts out with, “A severe shortage in aircraft delivery financing is threatening to leave Airbus and Boeing stranded with perhaps 200 “white-tail” aircraft they can’t place with customers”.

http://www.aviationweek.com/aw/generic/story.jsp?id=news/aw111008p3.xml&headline=Financing%20Crisis%20Could%20Saddle%20Airbus,%20Boeing%20with%20‘White%20Tails’&channel=awst

I’m still reeling from when you and the lending community were recommending putting 20% down on a property to make a lender feel extra special when they did the borrower the supreme favor of doing business and getting paid.

We gave those lender now billions upon billions of our tax dollars to lend, which they are reluctant to do. FHA is supposed to help the little guy and yet they stepped in to refinance seconds, helocs, and lines of credit on over priced refis.

Now that everybody is whole again you’re surprised about what?

It makes no sense.

Those FHA loans are rich people business. Read the requirements again. Those increased loan limits were to get more high end, middle class borrowers into the mortgage loan security bundles. It was another way to help FHA sell off more loans to generate cash flow and appear solvent, in my opinion.