Why are our house values dropping and what can be done about it?

Banks were giving home mortgages to anyone under the sun. All a person had to do was be able breathe. They were doing $0 down, combined with interest only and adjustable rates. Blame both the banks and the goofballs that got conned by a bank sales person. These people that could not afford their homes, are now not being able to pay their mortgages and the bank takes the homes back. This reduces values of all homes. It's all a foreclosure crises. For your future: Never trust anyone when you are dealing with money. Most of all - never trust a bank to tell you the truth about anything. You do your research by reading.

President Clinton de-regulated the banks to allow just about anyone to be able to be approved by the financial institutions. This is the perfect example of having ideals that can't be achieved in reality. I respect what he was trying to do, it's just that it was a goal that could not be achieved without everyone else having to pay for the homes of those that couldn't afford them. Now everyone else is paying for the bad loans through their losses in their home values, and their losses in the financial markets. Everyone in the media likes to blame the banks. Sure it was greed driven, but they were playing by the rules that the government set. If your boss comes to you and says "Hey, I really like you, so even though everyone else has to work 40 hours to get health benefits, you only have to work 20 and I will even pay you for 40 hours, and I will give you benefits!" Would you say yes? How many people would say yes? The boss makes the rules, but would it be right? So then it got even more complicated. Loans were being given to anyone. Banks were lending 125% of the value of the home and allowing people to take the 25% in cash. Loans were being originated that were called SISA loans (Stated Income Stated Assets). In other words, you don't have to prove anything. Just tell them what you make and what you own, and sign on the dotted line. Everyone in the industry knew that this was going to blow up! Washington didn't listen. They didn't want to because the booming real estate industry was pulling the rest of the nations economy with it, UP! Home sales is the driving force of the economy, so we had years of artificial glory days. Then, as the media is prone to do, they screamed and screamed that the bubble was going to burst. They screamed this year after year until it burst. In any other boom time in the economy, such peaks would be corrected by natural adjustment, and deflate more than explode. The fear mongering caused by the media made sure that it had years of non-stop coverage, keeping people glued to the screen to see how bad things were still going to get. What next? What bank dies next? Who is to blame for all of this? Who knew about this first and should have done something? Trillions of dollars in home values have been lost in the US in the last couple of years. What can be done about it? Well, as soon as the media decides it's time to start spinning the positive (don't hold your breath, because misery attracts more viewers than joy), people will again start to gain confidence in the economy (Consumer Confidence Index) and start to buy homes again. Builders will start to build homes again. People who buy new homes will need paint, furniture, plates, carpets, sinks, lighting, new computers, cable TV installed, Dish Network installed, fences, pools, lawn chairs, grass, plants, concrete, decorations, and everything else that people buy for their new homes because they want new things in their new place! We have a ways to go. Good luck in all you do.