1. Over the last couple of years people saw huge increases in the values of there homes.
2. Grandma and Grandpa said "crazy times be careful"
3. banks were pressured to lend to unqualified buyers, "American Dream for everyone plan"
4. People used there homes like piggy banks and then "oh crap! my variable rate mortgage that everyone warned me about just rolled and my interest rate is 10% on my $ 700,000 McMansion that is only worth $ 300,000".
5. Banks make more money if they forclose than if they shortsale, plus it's easier for the bank.
6. Grandma and Grandpa's house that was worth $ 500,000 3 years ago is only worth $ 250,000 now but that's OK because they have seen the cycle before and they didn't take out a loan against the inflated values. Their fine and you'll still get your inheritance!
7. The current administration, I will not throw names, has dumped hundreds of billions into the problem and that won't help anyone it will only tax the taxpayers even harder.
So hopefully if you learned anything it's that everything runs in a cycle. If you got caught up in it, that's fine hopefully you will pass on to your kids what you learned. I know that my kids are learning this, and I will try to keep as much information as I can because when they are old enough to buy a home and I tell them this could happen they would never believe me. Just like we didn't believe our parents and grandparents. Fortunately life goes on, interest rates couldn't be lower, and that house on the water you've always wanted is now affordable.
Good luck, be blessed, and most importantly call me so we can go buy your Dream House!!
P.S. pass this on to your kids as they start on thier new adventure!