Real estate meltdown of 2008
Until 2008, home values have been consistently appreciating year after year for 15 plus years. 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, California, Illinois, Arizona, and Nevada as well as other states and real estate investors believed that investing in real estate was the safest and most sure investment. Investors were leveraging on their homes to purchase second homes and investment homes. Then the real estate and credit meltdown of 2008 struck this country like a tornado. Values of homes plummetted everywhere. Homeowners lost all of their equities and a 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 and foreclosure rates have sky rocketted. 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.
New mortgage laws and 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 licensure requirements. I really do not think that bank employees do not need to be licensed and/or undergo intensive background checks. Personally, I feel that due to bank lobbiest, the banks got away with it. You can be a convicted felon and be employeed by a bank and originate mortgage loans.
Slow road to recovery after real estate meltdown
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 forsee 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.