Hmmmm, where was I?
Oh, yes, the banks are losing their shorts. They have loaned money, in good faith, to people and are now stuck with houses and no money. They are not paying off the money they borrowed and no one is buying the houses they have foreclosed on.
Lower the prices, you losers.
My parents are not homeowners at this time. They sold the house I grew up in 1991 because my father had lost his job and was working for minimum wage and my mom's hours had been cut to almost nothing and they were afraid they would not be able to make the payments for much longer. They've played gypsy since then, working in a lot of places that provide housing (their current gig is on-site managers of a storage property). This has worked well for them, allowing them to stuff money in the bank like crazy. Now, they are nearing retirment and would like to find a nice house to buy. While, like me, they have no burning desire to own, they are afraid that a catastrophic illness will wipe out their savings. It would be safe if invested in a home.
My father surfs the 'net for leads on houses for sale in his price range. There aren't a lot, because while they have been saving, real estate prices have lost their mind. So, he looks at foreclosures. And, he has put bids in on several. Bids that always get rejected, because he is only willing to pay what he can afford. But here is the kicker. It is easy to see how much a person borrowed against their home and when. Sometimes you can find out how much they owed when the foreclosure took place. So my dad bids what was owing on the house + $5000. He gets a good price, the bank is paid off. Everyone wins.
The banks don't seem to be too concerned about getting paid off. They want a nice, healthy profit. Recently there was a foreclosure that $86,000 was owed on. Dad bid $92,000. The bank wants $135,000. Is the house worth $135,000? A house is only worth what someone is willing to pay and it is still on the market. The bank is losing money every day.
And I feel no sympathy for them.
Maybe I am wrong. Maybe I am just cold and unfeeling. Maybe I would feel differently if it were me. But I do believe that we, as a country, have lost any ability to take care of our responsibilites. It is always someone else's fault. And until we start taking responsibility for our own actions, everyone loses.