Reply #15: When they do their job right, [View All]

[SheilaT]

they make sure you don't try to get a larger mortgage than you can really afford. They are still not the ones setting the price. You could make an argument that the Realtors are the ones largely responsible for the huge run-up in home prices, especially in certain "hot" markets. Lending companies -- not all of which were banks, by the way -- lent the money.

This is not the only time this kind of thing has happened. Am I the only one who can clearly recall the "creative" financing of the 1980's? My husband and I backed out on a home purchase in 1989, because the loan we were offered (and to be honest we were really trying to buy a slightly more expensive place than we should have been buying) involved an ARM. The first three years would be low, but we realized we could not predict what would happen after that, and decided it just wasn't worth the risk and worry, so we cancelled that contract and a couple of weeks later bought a smaller,less pricy place with a 30 year fixed.