hypothetical here...

Can a family making $75,000.00 per year afford to buy a house for $300,000.00?

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http://thecourier.typepad.com/rightonthemark/

"To educate a man in mind but not in morals is to educate a menace to society." --- Theodore Roosevelt

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Jesus Was A Liberal

If a certain course of action makes the mouth-breathers furious, then that’s a good policy. – The Practical Environmentalist

And it's actually less than that when you consider the family wants a Wii, digital cable, a family cellphone plan, a nice DVD collection, a minivan to compliment the "work" car, and a broadband connection for all computers (which run on a wireless router)...

And then the eventual complaint that they can't afford healthcare....

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"You get the respect that you give" - cnredd

I oppose any bail out, irresponsibility should not be rewarded.This is about irresponsibility and greed. Many of these loans were speculative,house flippers got carried away with their greed.Also,many home owners were using their homes as a piggy bank and they got burnt..

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"Destiny must be shaped and not left to mere chance."..Spencer Collins ..

Yup...

This country is the land of opportunity...which means it is also the land where your opportunities can fail...

I don't remember the government twisting anyone's arm to take out a bad loan or twisting a bank's arm to give them one...

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"You get the respect that you give" - cnredd

I personally believe 2.5 times is too high.
2 times is probably a pretty good indicator if you have no other debt. As you add your debt you should be subtracting from the purchase price of your home.
It also depends on how much of a down payment you have. I'm guessing at $75,000 per year that you're probably not saving much. Likely your would be savings is going into a retirement account; either individual or a 401K or both. A lot of first time home buyers are buying on FHA or VA insured loans with very low or no down payment.
Some people also make the mistake of believing their income is going to rise over the course of their home ownership. This is usually the case but not always. My income went up & down throughout the '90s due to lay-0ffs. It's been on a steady incline since 2001 though. Today I could afford more house than I have. My point being is that you should buy a house based on your current income; not on future possibilities of what your income might be.

The reason I brought this up at the income & price I did was because I had this very conversation with a guy at work who believes a $300,000 for someone making $75,000 is perfectly reasonable. But, he also believes we can't just let all those people lose their homes. Of course I disagreed with him & we had a rather heated debate.

NOTE: I have been in a situtation where bankruptcy became my best option. There are all sorts of reasons. 1) my wife had loads of debt before I met her & got married. We only dated a year before we married & I didn't do a background check on her
And, I did not have any credit cards or any other debt of my own for that matter. 2) We were stupid with money. I allowed her to continue to use credit cards like they were going out of style. That was our mistake & bankruptcy was the solution; NOT A FRICKIN' BAIL OUT. All those folks should have to file bankruptcy & the mortgage companies should be forced to deal with their bad investments without government assistance.

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http://thecourier.typepad.com/rightonthemark/

"To educate a man in mind but not in morals is to educate a menace to society." --- Theodore Roosevelt

In regaurd to the Fed, I agree with Ron Paul that it needs to be abolished. This is a good case in point. The Fed was established to prevent another Great Depression. That mother of all recessions was caused by speculation. Everyone who knows anything about the economy have known about the speculation in the housing market for a long time. To be specific, it is called "loan sharks" and "predatory loans" trying to hook unsuspecting families into high interest rate payments on unsecured or barely secured loans.

So now we are bailing out the loan sharks that are the ones directly responsible for our current housing loan crisis.

To be fair, the blame can be shared by customers allowing themselves to be victimized. However, if we are talking about bail outs, my interest would be the customers, many of whom are young families.

After this type of experience, what we need to be doing is cracking down on all of the loan sharks to severely restrict predatory loan practices.

How much is that bring home? I'm about to start a refi this week...I just bought this house in May. My payment on a $300K house 15yrs/4.875 will be right around $2700. Doesn't sound possible without "creative" financing.

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Even if you hold the minority opinion, stick to your guns and go against the flow if that's what you truly believe. (CnRedd)