The foreclosures are so sad. I'm glad some people are getting good house deals on houses they would not have been able to afford otherwise but I ache for the people who originally bought the house and lost it. If the bank can let the house go for 300K less than it originally cost why can the bank not give the other couple trying to sell their overpriced house a break and re-adjust the principal owed on that house. I guess the bank must make more money by foreclosing and then reselling at the lower price.

I could leave some sort of educated, intelligent response but all I can really say is that

...it's all quite unfortunate for most, and wonderful for some.

It is a sad ordeal with the real estate market--it just proves that one person's loss is another person's gain,---however I would say-–buyers--beware!

This is a bittersweet story, indeed. One family wins, another looses. Very sad.

The way the prices were inflated makes me suspicious. This is something that California's legislature and our government need to investigate.

I admit I am not a financial genius, but wouldn't it make sense for the people whose homes are losing value to stay put, and weather the storm until the housing market regains some strength?

CommonSense...........Troubled Assets Housing Solution

The foreclosed housing inventory is simply too big for the Treasury department to purchase from the banks.
For every 3 jobs lost, a home goes into foreclosure. Five million people are on unemployment and by the end of the year, 5 million more unemployed will be added to the list.

Banks must immediately "RENT" these assets.
If the bank rented the asset at an 8% return on a $200,000 home valuation = $1,350 per month =$16,000 per year. This may be 25 to 30% less than the previous mortgage payment, but it is $16,000 more than zero.

BENEFIT
* Identifying a "Tenant" creates a potential buyer who can take over the asset after a qualifying period.
* Converts a vacant unmaintained shell into an occupied and maintained property
* Establishes an underlying basis for its valuation
* Converts a "toxic" Liability into an income producing Asset on the bank's Balance

OK, interesting article. Housing prices were overly inflated in recent years. What we're seeing now is close to (at about a margin +/- 25%) what we would have seen had there not been an OVERinflation. So it seems like things are evening out. Having said that, the person should be able to re-fi on the new appraisal for the house. So I don't understand why people are still foreclosing. The person who bought the house @ $500,000 can't afford it at $250,000 (that's bizarre).

I think this could have been prevented if we put oil coal etc into carbon fiber. Carbon fiber everything, coffe machines washing machines etc.

It feels like I will never be able to afford a house – or even a new car.

Im an air traffic controller and make plenty of money. My house was purchased for $250,000. I could have easily had a house for $400,000. But im not an idiot. If you want a big house but think you might be cutting it short on money get a 30 year loan not 15. Saving makes life easiar.