I’m of the mind that some of the Wall Street shake-up happening now due to the housing bubble is probably going to be a good thing in the long run. Wall Street needs to be more accountable and honorable in its dealings. So it’s a bit of money karma that stalwart firms are going down right now: Lehman Brothers has shut down, and Merrill Lynch was barely rescued by Bank of America.

Banks are also a bit unstable right now; I’m glad that my bank, Wells Fargo, did not engage in mortgage speculation.

Some folks are agitating to stop Congress from bailing out people with looming foreclosures:

All we hear these days is whining from reckless home borrowers and their banks.

But did you know that renters are 32 percent of American households? And that homes in foreclosure are less than 2 percent?

So why is Congress rushing to bailout high-flying borrowers and their lenders with our tax dollars?

For more: AngryRenter.com

It’s not just poorer folks who are going through foreclosure; many McMansions are also being foreclosed:

The sharp increase in housing costs — and the desire to live in brand-new, spacious houses with modern features — led many affluent buyers to take out loans they couldn’t afford.

“People had in their head, ‘I need a mud room, I need giant columns, I need a media room, and I’m going to do anything to get it,”‘ said Robert Lang, co-director of Virginia Tech’s Metropolitan Institute, a research organization that focuses on real estate and development.

Here’s a great article in Fortune explaining the mess behind the mortgage meltdown: Chaos on Wall Street

From reading the likes of the Housing Bubble Blog, the mainstream media dropped the ball on the looming mortgage crisis. Yet, editors at top newspapers believe they provided quality coverage. What do you think?

What kind of person would walk into someone’s home and ransack it, just to get revenge on a bank? Well, one Florida realtor did, when the condo she was renting out went into foreclosure. (Even though she had been collecting rent payments on the condo, she had not been paying the mortgage in full.)

Showing complete and absolute disrespect for her tenant, she removed the fridge (that was in use), spilling eggs and jelly all over the floor. She removed lighting fixtures, ripped out a toilet, and even took her tenant’s coffee pot.

Alas, she is not alone. A lot of people going into foreclosure seem to want to take it out on the house and the bank. In the worst scenarios, some have left half-starved angry dogs for the bank to deal with.

All this just goes to show how insane some people get over money and property. It’s a good reminder to not identify yourself with your bank account or possessions. Those who overly do so run the risk of losing their minds once they lose it all.

Did you know that one of the major causes of the mortgage meltdown has been home buyers “fudging” their income on their loan docs, with the help of certain mortgage brokers? There has been such an epidemic that a new term has been coined: the liar loan. Lying on your home loan isn’t the same thing as lying on your online dating profile: It is a federal offense with a potential fine of up to $1 million or 30 years in prison.

Banks are now tightening up their lending standards; don’t expect to be able to get a liar’s loan anytime soon now.

If there’s one refrain heard over and over again from homeowners struggling to fight foreclosure in the sub-prime mortgage crisis, it’s this:

“If I had any idea that the loan would turn out like this, I would have never signed it.”

Unfortunately, it is your responsibility to read the fine print on your own loans. If you don’t understand something, don’t sign it! Take some time to learn about money before committing to a big loan that you might not be able to pay back later. Otherwise, you open yourself up to be taken advantage of. Read more

I, more than anyone, understand that sometimes things happen that are outside your control and hit your finances. In my case, it was illness. And yet, as you read more and more articles on the housing bust, it’s clear that a lot of people don’t want to take responsibility for their own poor financial choices. Read more

The housing bubble has apparently spread across the Atlantic - subprime mortgages have also infected the housing market of Britain, and now Britain’s financial regulator is warning that more than one million people could lose their homes in the next 18 months.