I have continually read references to homeowners who maybe defaulted. Many people still do not understand the extent and origins of this housing collapse. I have heard people called liars and deadbeats among other things. It is a very simplistic answer for a much more complicated situation.
There is plenty of blame to go around.
The so called "Deadbeats" didn't cause the massive meltdown in the industry. The majority of people that took loans were hard working people that were capable of paying their bills. The media and the self righteous like to blame the home owner when the reality is that the homeowner is the least to blame for drastic drop in values. In a reasonable stable or flat market anyone who ever has trouble with a mortgage has always had the opportunity to sell. This has been true in general for most areas of the country except for a few boom bust areas.
The banks are far more to blame for the outcome. You can see now they are at the heart of the issue as the they take get buy back requests for bad loans. The real estate issue started about 3 years ago and just now everyone is getting their act together to make things right? The banks new the longer they delayed that they may be able to have successfully moved the mortgages down the line. We are seeing rates of foreclosure pushing toward the rates experienced in the great depression. There is no way that is the result of foreclosures.
If 95% of people are paying their notes and the system still had a meltdown is a clear indicator it was not the individual foreclosure that was the wrench in the wheel. It was the mortgage backed securities market that went into deep freeze because of the way the loans had been packaged and sold. The ratings were misleading and possibly fraudulent.
If such a small percentage of defaults can nearly bring collapse to the world wide system it is more reflective of of the defects in the Mortgage back security market.
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