yes and has been slowly declining since the early 90's.

I can understand a little of this, since I was once in a shaky predicament. In 1999 I married my wife who had a house on the market which wasn't selling. We decided that rather than pay half a mortgage (her ex-husand being the other half) and pay rent we'd just refinance the house and buy out the ex with a quit claim deed since there was no real equity in it.

My credit wasn't great. So we shopped the loan sharks in order to get the house. Really we had little choice, were naiev, and quite desperate. When one loanshark told us about the A.R.M. loans we hungrily believed all his lies, and yes he did blatantly lie to us. He assured us that the floatingpoint interest would only climb slowly and that we would be able to refinance after 2 yrs without a penalty which would be plenty of time. The other kicker was we didn't even have to make a full principle payment. In fact we didn't even have to pay the full interest amount.

The loan sunk us. after 2 months the loan had jumped from 3.8 to 7, the next month from 7 to 9, and the following month it was at its ceiling of 12 percent.

While we started out fully intending to make at least the full interest payment we couldn't afford even that at 12%. We should have paid the penalty and tried to refinance immediately, but we were discouraged from the process 6 months earlier. So we sat it out until we the penalty period ended and it cost us about $10,000. Since then we've refinanced a couple of times, but always with a fixed rate and tell everybody we can about the dangers or Adjustable Rate Mortgages and the liars who finance them.

So from my unfortunately NOT UNIQUE perspective, I know pretty well what got us into this mess. I've seen this for a while, but am only now trying to figure it out where this came about. The following is a lot of my opinion and gut checks so don't take it as gospel, however I think its a fairly accurate.

Since the early 90's the requirements to get a mortgage have been relaxed more and more. The banks were selling loans in bundles to other banks and from what I hear Freddi and Fannie were under a lot of pressure from congress to buy up more and more of the shaky loans. After 9-11 the situation was exasperatted when the fed, trying to stabilize and stimulate the economy made it even easier for high risk buyers to get a loan with lower interst rates and more A.R.M. than ever before. Over the last few years the housing market has been extremely inflated because of all the new home buyers.

The straw that broke the camel's back has been the high cost of fuel. People just barely making it or not making it were getting in deep at the pumps. Many quit paying the bank, and the banks are foreclosing as never before.

There is plenty of blame and irresponsibilty to go around. From the bottom there is the schmuck who got himself into an ARM or into a house he really couldn't afford. Up a bit higher, you have the loan sharks, feeding on the schmucks, knowing that any loan they made would be bought up by a larger bank and they would not be left holding the bag. Up higher are the larger banks who bought the bad loans. Even higher than that you have policywonks in congress pushing banks to loan money to the schmucks to meet whatever cause or agenda of the day was. At the top level you have the President. Both President Clinton and President Bush had a role in bringing this mess about.

So beyond the blame game what can we do? First we need to figure out who at the highest levels of government screwed the pooch. The presidents while deserving of blame can't run again, so they get a by for now. Maybe the history books will do them some small amount of justice. The policywonks from their cabinets are still around however. Many of the congressmen are still around. We need to ferrett out their names and make sure they can't get near the financial controls again. Ever. Next we need to fix the loan industry. We need to tighten up the loan rules to more historic requirements. A potential homeowner needs to establish good credit first, and needs to come up with some sort of downpayment. I don't care if its only $5000, there needs to be a downpayment involved.

Last of all there ought to be some incentive for those who don't forclose in this perilous time. They should get a gold star on their credit. REB its people like you and I who are going to help this country past this. As an incentive to stay the course, we should get to pay lower interest rates on our houses and cars in the future, dependant on never ever defaulting on anything, ever.

I don't know if the bailout is necessary. I hope not. The idea of it makes me sick. Some good housecleaning and controls might be enough to stabilize the market. Hopefully its not too late for that.