Science Forums 2

[Freddy]

This crisis is going to explode in the next two years as the interest rates are adjusted up. Two groups are at fault, first is the greedy lenders who made loans to people they knew could not afford them when rates were adjusted and who also told consumers they could refinance later to a fixed rate. The second, is the naive, stupid, and/or uneducated consumers who signed on the dotted line for property they could not afford at higher rates. The one group who is not at fault is the taxpayers who wisely stayed out of this mess.

The only way out is for lenders to negotiate with consumers and take a loss by giving them affordable rates and allowing them to keep their homes. If they do not then the losses will be too large to absorb. Some lenders have seen the light and started down this path. The US taxpayer is in no mood to bail out lenders and consumers, who have gotten themselves into this mess, as they remember the S & L crisis and its taxpayer bailout.