The Mortgage Crisis and When Will It END?? The House of Cards

By
Real Estate Agent with Barnes McQuade Realty

Unless you have been living in a shell and have not turned on the TV in the past 3 or so years you are well aware that America as well as the rest of the world has been subject to a major downturn in the overall economy.  Experts....if there are any in the economic field claim that downturns occur every twenty years or so and it usually has a catalyst behind it.....this one was the housing market.

This downturn though in my opinion was spurred by GREED...nothing more nothing less.  When thoroughly examined and broken down to where it is explained in layman's terms, you seem to notice that it all goes back to the same theory.....if it seems to good to be true...it is;  hence people buying homes with no job or credit is basically what happened.  Though this is WAY too complicated for me to understand myself and break it down, there is a series on CNBC called "The House of Cards" and it does the best job so far explaining what has happened.  I must warn you though...it will make you mad.

As of last summer ('08) there were approximately 7.5 million sub-prime loans being serviced and many of those could have possibly qualified for a prime loan; an A credit rating.  Around 70% or more of these were ARM loans that the rate re-adjusted to a higher rate 1-2-3 years later depending on the terms.  The majority of these loans were written in 2005-2006 and the first adjustments started about 24 months later.....this blends into the time-frame of the meltdown...2007-2008 and will more than likely continue. 

We are now all in recovery mode AND for agents like myself SURVIVAL mode.  Things are definitely getting a little better, but very slowly.  It is a great time to buy; low prices and low rates, but to buy you must have good credit and a job......two things people should have had before the meltdown.  In Wake County in 1998 there were almost 1,000 foreclosures....in 2007 there were almost 4,500 and in 2008 there were just over 2,000; so you can see they are going down.  Hang in there with me and as always visit our site for more Real Estate information.

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