Real Estate And Mortgage Meltdown Of 2008
Overall lack of concern, awareness, and education caused the goverment, banks, investors and rating agencies from misusing and misunderstanding the financial system and ultimately causing it to collapse.
Money was easy to get and there were mortgage programs such as stated income mortgage loan products where there is no income verification and all the borrower needed to do was just state his or her own income. There were adjustable rate mortgage products with teaser introductory rates where the starter rate was a negative amortization rate program where your loan balance increases. Once the teaser mortgage rate period was over, the monthly mortgage payment doubled, tripled, or quadrupled. How can a salaried employee afford the doubling of his or her monthly mortgage payments. Homeowners were falling further and further behind on their monthly mortgage payments and the foreclosure crisis was about to begin and boy, did it last for almost a half a decade.
Real Estate And Mortgage Meltdown Of 2008 Hits The United States Harder Than Any Hurricane And Lasts For Many Years To Come
Real estate prices have escalated double digits in many parts of the country where nobody saw a potential real estate and mortgage meltdown was in the works. Many American families thought that investing in real estate was the hottest game in town and the most conservative investment. Some folks owned two, three, four, or more homes in the hopes that the increase in real estate prices will continue to climb year after year. Then the real estate and mortgage meltdown of 2008 hit our country like a major hurricane and millions of homeowners were sitting on homes that their mortgage amount was higher than the value of their property.
Foreclosures And Bankruptcies At Historical High
Mortgage lenders caused the problems by lobbying for lenient laws but at the same time doing what their investors wanted who ultimately pays their salaries. People ended up defaulting on their loans because the interest rates and housing prices fluctuated in ways they did not expect. At the same time, they were caught by the salespitch and media in turn buying into the hot housing market. Mortgagors were expecting property values to rise and interest rates to stay stable. Market works by having government, investors, and lenders working together.
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