Pointing the finger at you

The mortgage crisis is a joke. Who in their right mind would even agree to an adjustable rate mortgage(ARM). The name says it all. Who cares if the introductory rate is lower than the fixed rate, it's introductory, it's not going to last. The reason they call it adjustable rate, is because they're going to adjust it. So its no suprise that most of the time they adjust upwards(that's how the lenders make money). To agree to an ARM you must be either naive or stupid.

An example of stupid appeared in the Detroit News a few months ago. The story was about a construction worker making $15 an hour buying a home some around $600,000. I remember something about him buying the house from his bosses brother, so it sounds like his boss is a jerk, but that is no excuse for his plain stupidity. I don't remember whether this had anything to do with ARMs, but it's still a great example. There is no way that someone making $15 an hour could afford a home like that, especially if they intend on eating and paying taxes, let alone the interest on a mortgage of that size. 600,000/15=40,000, it would take this guy 40k hours of work to buy that house, or 1000 weeks which is equal to 19.23 years and again that's pre-tax, pre-food, pre-everything. With people making moves like this it's no reason we're in the midst of a mortgage crunch.

The blame can't be blamed solely on the consumers however. The truth is the banks screwed themselves while trying to screw everyone else, but these people voluntarily agreed to be screwed by not knowing what they were doing, so they only have themselves to blame.

Don't get me wrong it's a terrible problem that will and is having widespread affects. A bailout, however, seems so wrong. These people weren't swindled. The government should do something to help these people get back on their feet, mostly just so these people don't act as an anchor on the entire economy. But in a twist of irony lets give them government loans, and see if they learned their lesson or if they just repeat the same mistakes and carelessly spend/waste their money again.