Mortgage Crisis
Posted on August 18, 2009
Filed Under Mortgage Updates
It’s hard to believe that just 2 years ago, houses were being sold so fast and for such high prices, that the market became grossly overbought. Part of the reason for this was that banks that were lending to homebuyers had such loose standards to qualify, that consumers were getting 100% financing on loans that they could never reasonably pay back. Some of the monthly payments for these loans were not locked in, and could rise, making it impossible for a homeowner to afford. This was clearly a destructive course that really single handedly lead to the severe recession that the United States still finds itself in. The problem now is that banks have become so rigid with their qualifications for these loans, that it has become very difficult to receive a loan for a home. The real solution would be a happy medium where the qualifications are not so loose that anyone can get a loan, but not so rigid that only those with enough capital to put 20-40% down can qualify.
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