Do you think alot of people are in foreclosure because they lost the "fitting-in" game that is America.?

Seriously, I bet the majority of people who are in foreclosure are in it because they bought their house out of social pressure (explain later) and the need to fit-in.

Social pressure is a problem with people's wallets in this country. I cant tell you how many people I know have bought houses in the last 3 years because of it...here is my list of people I know...

1. I must buy a house because everyone I know is buying one.
2. If I buy a house my parents will think better of me.
3. If I buy a house my employer will view me as more responsible.
4. If I buy a house women will be see me as better marriage material.
5. A strong case of self-conscience and just a sheep mentality as a whole.

Countless more reasons and guess what? Every single one is in foreclosure or behind on payments.

Questions:
Why cant people wait and do things when the time is right instead of rushing to just to impress "society", "friends" and/or family?

Do you think alot of people are in foreclosure because they lost the "fitting-in" game that is America?

That's a good question and a very interesting theory. I largely disagree, but you make some thought-provoking points.

I think it was simply greed and stupidity. I agree with you that most of the people who bought and are in foreclosure should never have bought. And peer pressure, the "keeping up with the Joneses," may have had something to do with it. But many/most of the people who bought knew...they absolutely knew...they couldn't afford those properties. Forget for a moment that 3 bed/1 bath ramblers that 5 years earlier had sold for $100,000 were now selling for $600,000.

You had people who were earning $30,000 a year buying those $600,000 properties. They were buying with no money down. In fact, they were using mortgages that gave them money back at closing. Some told the truth about what they earned; others used stated income or no doc loans.

So why'd they do it? You're suggesting peer and social pressure. I think it was because they saw people who'd bought 6 months earlier making $50,000 or more on a property. Greed.

Let's take your points:

1. I must buy a house because everyone I know is buying one.
COMMENT: There was some of that. But a lot of it was because George down the street did it and made $50,000, or Luis just sold a property for $100,000 more than he paid a year earlier.

2. If I buy a house my parents will think better of me.
COMMENT: No. Absolutely not. Some of those buyers had parents born in the 1920s and 1930s. They went through the Great Depression and World War II. They knew, and preached, about living within your means. Those parents would have been appalled at such behavior. And even Baby Boomers (of which I'm one) weren't irresponsible about money. I would never have thought better of a child if he/she had made an irresponsible purchase.

3. If I buy a house my employer will view me as more responsible.
COMMENT: I doubt it. I've had maybe 7 employers, and none would have cared.

4. If I buy a house women will be see me as better marriage material.
COMMENT: Maybe. But from what I've seen (sorry for being sexist here), women go through two basic stages. The first is "sowing their oats." They have fun. They're looking for the good looking guys with the great jobs willing to spend lots of money on them. Then, when they're looking for marriage material, they look for someone responsible, a good financial provider, and someone who will be a good father. A house, per se, doesn't count for much in either equation.

5. A strong case of self-conscience and just a sheep mentality as a whole.
COMMENT: I agree with the sheep mentality aspect.

Finally, while there's pressure to "fit in" in America, it's far less so than in other countries. You have degrees of diversity here in America that you'd never find, or would never be tolerated, in many other countries, especially in Europe and Asia. That's not a criticism of any country or culture, but just an observation. The American reputation for independence--an independent streak--is pretty well deserved. (Just look at some of the contenders in the last presidential campaign: a woman, a black, a fundamentalist Christian/minister, a Mormon, a war hero, and more. And none of them tried to hide it by "fitting in" to whatever the stereotype of a President might be.)

Again, very good question.

No, I think a lot of people are in foreclosure because their job situations have changed. For example, our town recently shut down a factory that employed 250 people Many of them had worked there for over 20 years. If you are in your 40's and you lose your job, a lot of companies won't hire because of the cost of medical insurance.
If you have been responsibly employed for that long a period of time, why should you not have a house. Renting is much more expensive and the homes are not in nearly as good condition. Why are you criticizing people who are trying to have something in their lives?

What people want most in their life is security and owning a home is supposed to provide that. I have never heard anyone discuss purchasing a home for the reasons you have stated.

No, it's because many people in this country feel they have a "right" to anything and everything, and it doesn't matter if they can afford it or not. That's also why so many people in this country are in so much credit card debt.

The "I deserve everything I want" mentality overrides simple math.

You forgot the BIG one. Home ownership as the culmination of the American Dream. Some people are built for home ownership and some are meant to be renters.

However, they are not in foreclosure because they failed to fit in. They are in foreclosure because they over-bought or signed-up for creative financing that they ultimately could not afford. If they had bought an affordable house at a fixed-rate mortgage they'd be sitting pretty right now.

You also have to consider that until recently, a home was the best investment that you could have. Nobody foresaw the value of homes decreasing so rapidly.

The credit industry helped that. They offer interest only and reverse mortgage loans. One wealth destroying ploy after another. Its not just banks, its credit cards, credit concealer's, credit repair services, credit bureau's, and so on. And they push them like drugs to everyone. If you want evidence look in your mail box and a guarantee there is some company looking to offer you some type of credit. Pay off all of your loans and credit lines as fast as possible and never take a loan again, then you don't need credit.

I haven't heard of it called the "fitting-in game', but I've heard it called "keeping up with the jones's". But they both mean the same thing. And I believe you are right on.

People are predictably irrational when it comes to consumerism. The banks were not particularly helpful in the housing situation. Some of the mortgages were worth taking a risk because of "walk away" policies. Also, if someone is confident that they will live in an area for more then seven years and be able to work, then a home is a good idea. Many overestimated the future job market. Some of your points may have played into the bad decisions. Number five is a bit harsh since everyone makes irrational decisions everyday. Minimizing irrational behavior takes a lot of discipline and knowing how to look for risk factors.

Yup.. everyone wants to keep up with "the Jones"

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