Qualifying For Mortgage After Real Estate Meltdown Of 2008

This BLOG On Qualifying For Mortgage After Real Estate Meltdown Of 2008 Was UPDATED On July 29, 2017

Until 2008, home values have been consistently appreciating year after year for 15 plus years. Nobody in the world ever thought that the real estate and credit markets would crash. Real Estate Investments was considered as one of the safest investments in the world.

  • Investing in real estate was the hottest ticket in town throughout the United States. 
  • Many Americans had second, third, fourth homes and even the most novice real estate investor were flipping homes for quick profits.  
  • Property values tripled in Florida, Texas, Alabama, Kansas, Ohio, New Jersey, Georgia, California, Illinois, Arizona, and Nevada as well as other states were consistently appreciating year after year.
  • Investors believed that investing in real estate was the safest and most sure investment. 
  • Investors were leveraging their homes to purchase second homes and investment homes. 
  • Everyone made good money from investing in real estate.
  • Then the real estate and credit meltdown of 2008 struck this country like a tornado. 
  • Values of homes plummeted everywhere. 
  • Homeowners lost all of their equity in their homes.
  • Large percentage of them had mortgage loans that were higher than the value of their homes. 
  • Flocks of hard working Americans filed bankruptcies and were turning in their keys to mortgage lenders.
  • Foreclosure rates have sky rocketed. 
  • There was no such thing as fair market value for residential homes.

Mortgage Industry And Real Estate Meltdown

The whole mortgage industry caved in back in 2008.

  • New rules and regulations were enacted and implemented. 
  • Over half of this country’s mortgage loan originators were forced out of business due to the credit and real estate meltdown. 
  • Over half of this country’s mortgage companies have closed their doors.  
  • Smaller banks throughout the country were closing on every street corner and the larger banks were gobbling them up.  
  • Thousands of mortgage banks also closed their doors due to the financial and real estate meltdown.

Mortgage Regulations Enacted Due To Credit And Real Estate Meltdown

Due to the credit and real estate meltdown of 2008, thousands of new mortgage laws and regulations were enacted.

  • The SAFE Act and the Dodd-Frank act were enacted and implemented. 
  • All mortgage loan originators who were mortgage bankers or mortgage brokers had to undergo major licensing requirements. 
  • Mortgage loan originators were required to take a Federal exam and an individual state exam for each state they were planning on originating mortgage loans. 
  • Mortgage bankers and mortgage brokers had to undergo intensive Federal and state criminal background investigations and personal credit background checks. 
  • Credit background checks are required for all mortgage bankers and mortgage brokers every year. 
  • Employees of banks were exempt from licensing requirements. 

Recovery Of Real Estate Collapse

It has been half a decade since the Great Real Estate Meltdown of 2008.

  • Housing values have stabilized and home sales are picking up slowly. 
  • The Federal Housing Administration have created phenomenal mortgage loan programs for first time home buyers and for home buyers who have had prior bad credit. 
  • Costs and fees to get a FHA mortgage loans has been steadily increasing. 
  • Mortgage rules and regulations change on a monthly basis and I do not see in any easing with mortgage regulations. 
  • A mortgage loan originator needs check on new mortgage rules and regulations on a daily basis in order for him or her to be competent in the business.

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The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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