My housing crisis? I don't have one!!!

So others have written more and maybe better, but I just dug 2 cents out of my pocket so I thought I'd throw them in:

Houses are too expensive. Have been for several years now. Falling housing prices are GOOD for the country, not bad. Corrections to any over-inflated market are, in the long run, good. I feel a little bad for folks whose home prices have crashed by 20-50% (CA, FL, AZ) but those prices were fake, and the bleed over lead to overinflated home prices elsewhere.

Moreover there have been far more people who have suffered due to the housing bubble being inflated than there are people who are suffering due to its bursting. Regular, wage-earning and salaried people who have been left without any hope of getting a house any time soon. I am now gainfully employed and will have no problem getting a mortgage for up to $225k, but that doesn't get me much around here. A year ago I probably could have gotten a mortgage for nearly $500k (with my current finances), but I'd have had the sense not to do so. In fact, even with the relatively small post-doc salary I had in Chicago, I probably could have found someone to give me an idiotic mortgage.

I'm not quite so arrogant to believe that everyone who took out such mortgages is getting their comeuppance, because most people don't understand (or care) how the financial side of things works. They trust that those who do (or should) will make things right. And on the one hand, that trust, while misplaced, was not wrong. Lending institutions do what is in their own best interest (not their customers) but it is in their best interest to have their customers pay their mortgage/loan off, not to get in over their head.

The feedback loop killed them: poor lending practices fueled housing price increases which forced poor lending practices as required policy for many people to get houses, which was justified by the rapidly increasing cost of homes which had been fueled by easy credit to begin with...

All that said, I do not support any type of bailout. Borrowers who can afford payments should make them (exception coming). Those who can't pay or whose home values have fallen to less than 80% of the purchase price should walk. Foreclosure is not good, but it is not nearly as bad as bankruptcy, and the penalty is wiped after 3 years of good credit, so it's hardly permanent. Banks should be allowed to only go after those who can afford to pay, whose homes are worth more than 80% of the purchase price, and those who have more than one house and are not foreclosing on all of them.

It is selfish, but I want affordable housing because I won't spend $220k for a two bed one bath slab foundation condo. I simply will not.