The Mortgage Crisis - The Housing Sub-prime Meltdown
It is a big problem today in the housing market, too many sub-prime loans and now we have too many people who can not pay their mortgages. One of the big problems is that we had too many greedy lenders out there that were interested in the short term fast buck and really did not care about the long term impact of the housing market.
Sub-Prime Mortgages is a type of mortgage where usually it is easy to qualify with no money down, no job requirements, and will typically have a very low introductory (teaser) interest rate for a short period of time, usually 6 months or so. The big problem is that the people who signed on the dotted line for these loans typically could only afford the monthly mortgage payments on the teaser rate of their loans and when it came time for the monthly loan payments to go up, they could not afford it. The lenders knew this and let it happen just to make quick, fast money.
What has happened now is that he have more and more people who are getting foreclosed on because they can not afford their homes. The lenders are now holding houses they can not sell because the prices have dropped and there is so much inventory out there. Now if you are in the situation like this it is a crisis, however if you are looking to buy a house it can be an opportunity. There are many areas of the country where the price of homes have dropped and with the lower interest rates it can be a great time to find a house.
Just remember that we must learn from the housing mistakes that we have made and to become stronger from them.
By: Bryan Burbank
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