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Donna Said:

Do u have more debt than equity?

We Answered:

Nope, we bought a house UNDER what we were approved for, significantly, so if we sold our house this red hot second, we would break even, more or less. We do not struggle to pay our mortgage, though it is a big expense for us every month. As for the strict budget- we've always done that. in this time people are losing houses and selling personal items/taking out loans to stay afloat, we continue to live our meager lifestyle and sock away $ every month, for retirement, emergencies, a new car, and 2 college educations...and I am a stay at home Mom, my hubby blue collar....the trick is not to cut back when times are tough, the trick is to already have cut back long before so it has little impact on your life when the economy goes to hell in a handbasket.

As for family and friends- some are hurting, pretty badly, I know of 2 separate families personally who lost their homes..but some live as we do and are fine, some have HUGE savings already so they are just fine.

Corey Said:

Is it possible the U.S. federal govt. is creating its own subprime-esque bubble that WILL burst?

We Answered:

Not possible.

It is probable.

Hector Said:

Didn't Congress create the Federal Housing Authority, Fannie Mae, Freddie Mac to help the public buy homes?

We Answered:

They did.
They did.
Now they can't pay for them!!!!!!!!!!!!!!!!

Jimmy Said:

Is the "Housing Crisis" as bad as some make it out to be?

We Answered:

The FBI is looking into possible criminal activities now. I think that's better than bailing anyone out.

Your question is "is it that bad." Well, yes and no. With real estate, the old saying that the three most important elements are "location, location, and location." With the crisis, it's also location. Some sections of the country are just fine. My house has appreciated nearly 20K in the past year. My neighbor just sold her house to retire to a less expensive community. Her house is more upscale, and they had a huge appreciation. We are also in an economic boom right now. Two years from now, things might not be so sunny here.

There are markets, however, where 3 out of 4 houses on the market are actually in foreclosure or about to go into foreclosure. That's pretty bad by anyone's measure. However, it isn't as simple as just bad credit risks being extended credit, although that's part of it. It was also people who were otherwise good risks trying to flip houses by putting a little bit down and buying more than one house. I read about a 52 year old woman who invested her entire savings in houses, buying 5. Then the over-inflated housing bubble burst, and not only could she not flip the houses, but she couldn't even sell them for what she needed to get out. She lost every penny she had, declared bankruptcy, and walked away from the houses.

She and the banks that extended credit to her should NOT be bailed out. She knew what she was signing when she signed. They knew what they were having her sign.

I think we should apply a little tough love to this crowd.

We are interested in some stocks that hold real estate income properties - things like Comfort Inns. The purchas price of the stocks have been falling, and all anyone can figure is because they have "real estate" in part of the description. For us, it's a great time to pick up some bargains, because the stocks are really sound, and not at all affected by any of the sub-prime nonsense.