Subprime woes, exactly the kind of crisis reckless capitalism and greed leads to!
 

Almost all sides of the problem can be explained by greed and pure blindness...

/rant

yep, when you lend money to people that can't afford to borrow it, it's no surprise when they default on the loan.

I have a friend that lives in a housing development where most of the houses are from 250K to 400K. When he moved in two years ago most of the houses were new and were selling like mad. Now it seems like 1 in 10 is for sale. People bought too much house on a variable rate sub-prime and now that rates are going up they can't afford it.

Damn... would be a good biz to find people that are running late on payments on ARMs, buy house from them for low price and rent it out to them, they dont get foreclosed, you got a tenant. Only works if you have good credit or cash.

Yeah, you need big money for that.

Which is why the fed is slowly increasing rates but not too much as to completely depress an already sad market. It's meant to give people a kick in the ass to not be so damn stupid and tighten their belts and realize they can't continue to spend $1.30 for every $1.00 they make.

If they can't afford paying just the interest on the loan, how will they be able to afford to pay rent on the same house?

Kind of like the porn industry.

18% introductory APR Consummer Credit :D

6 months down the road, you kick them out and then you can't make your own payments and so the bank you got your cash from dumps you and maybe even goes bankrupt and o joy.