<p>There were many contributing factors, but our government did play a part also. To encourage more home ownership FHLMC and FNMA did loosen up their guidelines in buying those “conventional loans” from mortgage bankers. At the end of the day originators need to sell or fund those loans, and the cheapest/efficient way for them to do that is by selling them to those agencies. Those guidelines used to be very strict - full doc(no drive by appraisal, or just do regular comp), 20% down, income verification. But when those agencies made those guidelines easier, those mortgage bankers took advantage of it.</p>
<p>I don’t think it is just one group of people that contributed to the melt down. It gets down to greed from everyone (politicians, bankers, consumers…) and lack of regulations. People may not want to hear this, but many banks are hiring back MBS professionals again with higher salaries and bonuses. They are gearing up to get back into the business again. I hope this time around there’ll be more checks and balances.</p>
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Applicant – that 500K will NOT get you a house where I live. It will get you a 2 or if you are lucky 3 bedroom condo or coop.
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<p>Living in a two bedroom condo would be uncomfortable, but it is certainly possible. I’m sure there are families larger than yours living in smaller spaces. I have a family of five and we live in a cottage with less quare footage than a double wide trailer - it is a little smaller than my uncle’s DC condo ($400,000), but we have an attic that we’ve renovated. You don’t NEED a house. If you’re interested in saving money, you’ll be fine in a condo.</p>
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<p>This is ridiculous. You’re basically saying this woman would rather not work than pay her bills. I pocket less than 3% of my income after taxes and bills (= EFC), but I’d rather work than not work.</p>
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<p>Well said. Even in New York City, with it’s famed “high cost of living”, there are thousands - maybe millions, aren’t there like eight million people in NYC? - of people who are federally low income - living at 150% of the poverty line or less. And that’s 150% of the same poverty line for NYC AND Wyoming.</p>
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<p>The middle class is just as competitive for scholarships - moreso, some might say, given the advantage middle class students generally have over their lower class counterparts - as any other socioeconomic class. But yes, they are out of the running for much need-based financial aid. There’s a huge difference.</p>
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<p>I can’t speak for the poster you’re addressing, but I would say yes. Both families live a $50,000 life style - not bad at all, not even in NYC. But Family A has $50,000 a year left over and Family B has no money left over. Family C, a low income family, has -$20,000 left over and Family D, with an income of $250,000 has $200,000 left over. There’s no harm in living a $50,000 a year lifestyle - it’s really not so bad. It’s a choice.</p>
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<p>Unfortunately, those colleges are private. They can charge what they want to charge. As with any product, if you don’t agree with it or can’t afford it, don’t buy it. High cost - even ranking - does not equal a great education.</p>
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<p>Well… yes. Low-income for a family of four is officially capped at $33,075 (except for in HI and AL). Six times that is less than $200,000. Ten times that is over $330,000. While I think they made a really stupid mistake to buy a house and that they should have gone for a condo or an apartment instead, almost no low-income family is going to buy a house for less than six times their income. That’s the way it works. I live in an area with a moderate cost of living, and it’s not hard to find a house for $250,000. It’s going to be tough, though, to find a house under $150,000 - which is, by the way, still 4.5 times the annual income of a low-income family.</p>
<p>In fact, my family rents. Until recently my partner felt a lot of ownership envy because we had so many acquaintances who were using dot.com money to buy their own houses or condos. This year, many of those people have mortgages that are underwater, and a number of them have been laid off from the same jobs that made them able to afford those mortgages. That combination means struggling to avoid foreclosure or giving up homes at a loss. In contrast, we’re paying the same rent we were paying 8 years ago, which has stayed pretty close to the market rate for rentals in our areas. We don’t have to pay for repairs, lawn care, or some utilities. </p>
<p>Of course, based on most definitions, we’re <em>actually</em> middle class, as opposed to those in the top 2% of incomes who just <em>feel</em> like they’re middle class. :-)</p>