Homeowners have already lost $2,000,000,000,000 (trillion) in equity, and climbing.

[Waiting For Everyman]

That's equity, not purchase price, that's skin in the game.

Just pointing that out. Forget the johnny-come-lately subprimes who shook out early, they aren't the majority. It's damn hard to buy a house, and then hang onto it, and make the payments for years and years - and lose it.

Just as tough as losing on a stock portfolio. And I guarantee it hurts a hell of a lot more being put out of your home and having nowhere to go, than having less profit than before in an account somewhere.

This has already happened to millions, and 5 million more are in some part of the process right now. The machine chews on! Every day. People losing on stocks are just starting to feel it now. But a huge number of people have been hurt awfully bad, and going through it for a long time already, and have been pretty much ignored if not ridiculed and put down for it, on top of their misery. (And I watched even that wave arrive a year or two ago - I've been hanging on the edge of foreclosure for 7 years, that's a real long time; I was in this boat with just a few, before the millions crowded into it.) Just some perspective.

This - what's happening now in the market - is not a surprise to me. I've been in this boat and watching the circles widen, and I predicted this to my friends last June, that it would get to the pension funds and then all of a sudden the public as a whole would start paying attention. What I've observed is this... Nobody has cared until it got to them, and that's why it got to them. Each successive wave still thought they were an exception, they were above it, it couldn't happen to them. It happened to other people b/c they screwed up or they weren't talented, or they were lazy or wasteful. Well call this a learning experience. That belief isn't so true, as a lot of people liked to think.

This is why it matters when it happens to other people - even if it's a small number of them. It matters just b/c of fairness and rightness. B/c if it doesn't, it eventually goes further. And eventually goes to everyones "shores". That's what reality teaches us, regardless of our ideology. This is exactly what Repubs don't understand. No one is self-made, and no man is an island.

And that's why Dems ought to be steering the boat. They get it.

No, I don't want to see anyone's pension decline. And I don't want anyone to lose any job. It doesn't make me happy at all. Because I understand it (loss). I really do. And I think lots of us here do, who've "been in it" a while (crisis mode, that is). But I do think it's good that more people are catching on to the truth of this lesson we Americans are learning now - that we're not islands, and we shouldn't structure our nation as if we were. These are tough times. And what I'd say, meant in the most encouraging way, is "buck up" now, because nobody (outside of "the leisure class") is going to get through this without losing something - don't even expect to.

But the good thing is we're in this together, whether we realize it yet or not, whether we feel it or see it, or not - being "all in one boat" is also a good thing, as well as being the kind of liability we've seen lately. We're going to have to be strong... as strong as we can be, realizing that we don't have the power to be secure - nobody does, in this world. The rich have that illusion, but that's all it ever is. As tough as this time is, it's also an opportunity - it's a CHANCE for better. Not a sure thing, but a chance - to turn a corner on a really bad era which hurt a lot of people for a long time. Maybe we'll make things better, and maybe we won't be able to. But it won't be easy up ahead, don't even expect it. "Life disrupted" is hard.

That's a given. And it's not something we can "get out of" by throwing money at it - that would be a mistake to try. We're already in it - because millions of are neighbors are already in it. This depression is an "invisible" one (to most of us - we don't see people in furniture-laden trucks everywhere on the highways), but it's just as real.

While encouraging our leaders we need to push hard on them for, and be thinking of solutions in terms of, what's good for all of us in this country, for everyone and anyone for a change - that's not necessarily what we're all used to. And I believe most of us (at least here) are going to be thinking that way, and do just that.

Well this got longer than I expected. But I just wanted to give the perspective of the "previous survivors", to the newly-harmed and/or threatened among us.

[mikeytherat]

1. $2,000,000,000,000 in REAL equity or inflated equity?

We sold our first home in 1999 for $105,000. In 2004, that house sold again for $250,000. That house was never a $250K house and never would be. Currently, one just like it on the same street is listed at $135,000. If our old home is worth the same, has the current owner:

1. Lost $115,000 in equity?
2. Gained $30,000 in equity?

I go with No. 2.

mikey_the_rat

[Waiting For Everyman]

4. It's relative to each owner, isn't it?

If you bought stock for $30 which was previously owned by someone else for $15... and the next day it was worth zero, how much did you lose?

You can say that people didn't actually pay for the full price of a house b/c it was mortgaged, but they were nevertheless obligated for the full amount. If you ended up with debt on something you no longer had, how would you feel? Would it still be owed - yes. That is a loss.

But that isn't even what I'm referring to, I mean the difference between what was paid on purchase and the actual market price years later - that's real equity. For instance my mortgages are $200K, but my home's value today on the market is $400K. That's $200K equity earned over 12 years' time. It's no different than holding on to a stock for that long - only much more personal, and much closer to people, and shelter is a necessity of life not an "extra".

It's just as real as pension equity. Both are in markets, as is always the case.

[2speak]

6. I like that

so....if I invest $10,000 in some stocks and it's value goes up to $30,000 and later it drops down to $12,500 in value then I didn't loose $17,500 dollars. So I shouldn't try and sell my house and you shouldn't try and sell your stocks. Your still profiting. Good way to look at it.

[El Pinko]

2. Nobody has lost any equity.

People who bought well before the bubble never had that equity - it was imaginary and based on fantasy unless you actually sold at the peak.


As for the people who bought at insanely overinflated bubble prices, well, maybe it would be wise to educated oneself about speculative manias and real estate crashes (there have been many throughout history) before making the biggest purchase of their lives?

They didn't have "equity" either. They foolishly bought into the hype and agreed to buy a house for double or more what it was worth.

[Waiting For Everyman]

3. Then pension "gains" are no different.

[El Pinko]

5. The ones based on speculation-driven ponzi schemes, maybe.

NT

[Honeycombe8]

7. That only matters if you need to sell your home, I think. I've lost equity. But it doesn't matter.

I still have my house. Doesn't matter it's lost value, since I still have it, it's the same house it was last year, and I'm not trying to sell it.

[Virginia Dare]

9. Or if you took a reverse mortgage, or mortgaged to the hilt...n/t

[Virginia Dare]

8. Meh, it's just paper..

fortunately I wasn't using my home like an ATM card. Sympathies to anyone who thought the carnival would last forever and did.

[Waiting For Everyman]

10. Well think of it this way then - homeowners' "portfolios" are worth $2T less.

I see we understand stock loss, but nothing else. That explains a lot.

[TornadoTN]

11. You can't lose what was never really there to begin with

That's the problem in a nutshell. All of the equity was magically borrowed out of thin air and people thought that they could live far beyond their means because of this magic equity.