Note: This article is a repost, since I’m traveling out of the country this week.

It seems like I can’t go a day without watching or reading another news story about how an innocent American family has become completely overwhelmed by debt. Each story is the same, a family goes about their daily routine, oblivious to their financial situation, when they get a call from their creditors.

Frankly, I’m getting tired of listening to the same story over and over again, when I already know who these people are victims of. Themselves.

Media abuse
The media loves to use “Joe Sixpack” stories, where everyday people are interviewed on otherwise extraordinary circumstances. The recent housing downturn has provided newspapers and television with an overload of stories about families that are finding themselves put out on the street. So what tipped the media off to the U.S. consumer’s financial problems? And more importantly, what led all these families to financial ruin?

The Real Estate Industry
The U.S. real estate industry (comprised of banks, mortgage brokers, realtors, and everything in between) had a phenomonal five years of growth. Real estate prices across the country were ballooning to record highs, and everyone involved was cheerleading the gains. At first, the housing boom was fairly contained. But like any financial mania, the average consumer eventually gets caught up in the game just as it is winding down. TV shows such as “Flip That House” gave people who could otherwise never afford a home the dream that could could fix and flip a home for enormous profit. After all, everyone was telling those hopeful consumers that they too could afford a home. So what happened?

The fine print
Unfortunately, an overwhelming amount of consumers either neglected, or failed to read the fine print of their mortgage documents. Sure, teaser rates on exotic mortgages were affordable. But nobody stopped to consider what would happen when their rates would reset. The sight of potential wealth can be blinding at times. And so, with reckless abandon, millions of families signed for an unaffordable mortgage, and virtually guaranteed their financial ruin as the housing bubble began to burst.

So who is to blame?
So who do you blame in all this? The bank that approved the loan? The TV show that pumped homeownership? The realtor who sold the house? In the end, the only person to blame is the one who signed the mortgage document. The media can portray these people as victims, but the sad truth is that the vast majority of people who are being foreclosed upon could never afford a home to begin with.

The people you see on TV complaining that their mortgage simply got to be too much are not victims, and should not be portrayed as such. The sad truth is that they could not afford the home they lived in at any price. Exotic mortgages got them into the home, and foreclosing lenders will get them out.