What would I recommend people do?? For starters, don't think about buying a house you know you can't afford.

I'm sorry, I have little sympathy for most of the people in foreclosure trouble now. True, banks were predatory and promised the moon, but when I looked for my first house, you were always told about basic principles about how much house you could afford -- Don't spend more than x percent (26 or 28, if I remember right) of your monthly income on housing.

Millions of people completely blew off that advice because they wanted to live large and figured the value of their house would keep soaring, which was not possible.

So I feel bad for the predicament most of the people are in, but they made their bed themselves.

Absolutely, the banks steered them wrong, but just because someone says it's OK to jump off a cliff doesn't mean you should do it.

Those of us who have lived within our means for the past 10 years are tired of being asked to bail out those who didn't ...

Sure, but that's not the question I was asking in this case. I'm curious what neighbors -- the ones who didn't make bad decisions -- can do when their block or community is being pulled down by foreclosures.

Do you cut overgrown grass yourself? Organize a neighborhood watch to keep an eye out for criminal activity in empty houses? Raise money to buy the homes?

Elected officials should take no unusual action in dealing with the foreclosure crisis. During this whole housing boom they eagerly increased property taxes even though appraisals were skyrocketing. They grew corpulent and intoxicated over all the extra tax money streaming into their accounts. Now that the ride is over, they have to sleep in the bed they made for themselves.

I say elected officials should take no unusual action because they should still do all the usual things. Most localities have laws against overgrown lawns, trespassing, squatting, property damage, and other things. Elected officials should absolutely be fining property owners for their violations. Squatters and vandals should be arrested and jailed with severe penalties for trying to worsen the crisis with their actions. Just because a property is bank-owned does not mean its upkeep is suddenly no longer important. It should be absolutely required for these properties to be somewhat maintained.

Neighbors should be eager to complain relentlessly about what's wrong with foreclosed properties. Otherwise, they should not have any responsibility for someone else's mistakes. If property owners don't want to care for their properties and try to just ride out the crisis, they should be threatened with eminent domain. The equilibrium market price will be reached very quickly then since most sellers would take some money over none at all.

This may seem harsh, but people and organizations must be held accountable for their actions. The only way to fix things is to drop prices so that normal people can comfortably afford to live in these houses.

One of the problems that helped magnify the problem (started by banks and other financial institutions that eventually got the local governments involved) was the desire to have all homes in their counties "upscale." They always state that townhouses, condos, etc. don't pay their share of the costs in providing services. Therefore, local governments passed stricter zoning laws to reduce this supply of affordable housing. This forced first time home buyers to delve into the townhouse/small home market, and with a limited supply (no new townhouses, condos, etc) drove up those prices, which meant people in single family homes could cash out and go bigger when townhome sellers looked to move up. Prices kept rising because of the limited supply of "affordable" housing, and all new construction were relegated to high cost housing. People cashed out and moved up with cheap credit and big downpayments. Those who got in late in the bubble started the chain reaction heading of deflation as prices got way out of hand. People who bought early on got the great deals.

People ended up buying more than they could afford because that was all that was available. Nobody wants to build new apartments or condos, unless they were upscale. Hence we are reaping what we sow.

That's a really interesting point, Flair.

Thanks for the thoughts, everyone.