Last year I wrote a blog called “Why people in the USA are polite and smiley rdquo;. This is part two to that blog.

This year the real estate bubble burst, and there are about 500,000 houses in a pre- foreclosure state. These people are a couple of months behind on their mortgage payments. These are the people who abused the bubble. They were thinking that purchasing an investment property with zero down and no money on your bank account is OK. The house was expected to magically appreciate in value, then an easy sale with lots of free cash.

Other people have refinanced their primary residencies several times extracting the cash from the equity and purchasing luxury items that they could not afford before.

Now, many of them can “t sell these houses even for 80% of the purchase price. These people put themselves in a really bad situation. What do they have to do now? Declaring a bankruptcy does not get you off the hook as it did in the past. They have to get a second job and smile to you even wider than before. Sad but true.