Spreading Around The Meltdown Blame -- Many Homeowners Need To Fess Up

As so many have been so quick to trash lenders, irrationally holding banks solely responsible for the ecnonomic meltdown that occurred in the U.S. and abroad, one of my pet peeves has been the comments of those who ignore the actions (or inactions) of Congress, and the blatant manipulation of home home mortgage and re-fi market by some very smart (or just greedy) homeowners.

This post is not about making money in commercial real estate, but serves as an example of the hubris, not of lenders, not of lawmakers, but of many, many home and business real estate owners. Not everyone tried to game the system. But as I have written before, there were certain members of Congress who willfully ignored loud, dire warnings about the problems with Fanny and Freddie (attn. Mr. Barney Frank); certain mortgage lenders who talked buyers into purchasing more than they really could afford; certain slimy mortgage brokers who intentionally altered loan applications; and certain home and commercial building owners who used their properties like ATM machines, constantly pulling out cash though re-financing.

So for those who want to irrationally just blame banks banks because they harbor some bigotry toward commerce and the entities that make the markets hum, I give you the following:

-- 40 percent of underwater borrowers took cash out of their homes.

Got that? Yes, 40 percent of those people who owe more on their homes than their homes are worth, re-financed at one time or another and pulled out cash. Probably to play, buy some expensive toys, or even pay a couple bills. And that 40 percent bears the blame for their trouble. Especially those who purchased other un-needed consumables (boat or cruise, anyone?).

NOTE-- THIS IS NOT AN INDICTMENT OF ALL HOMEOWNERS WHO ARE IN TROUBLE!!! Many homeowners are honest, hardworking, and ran into some trouble, and tried hard to work things out.

BTW, its not me pontificating on the subject (well, I have, but I am not the source of the info). The new study showing these statistics is none other than real estate and loan data aggregator CoreLogic.

An interesting story, to be sure. Check it out. And if you have a friend, colleague or neighbor who puts the blame on the banks, please correct them. And put this information in front of them.

They are not stupid, just ignorant. And as is well known, ignorance is uneducated innocence....