Garbage In Means Garbage Out In Real Estate Too

What do you do when you have a mortgage worth more than the property? Such is the quandry in which owners and lenders of mortgages have been stuck. It’s what’s most directly responsible for the current economic malaise. Those that were not qualified under norm conditions still managed to secure loans for property that they ordinarily would never have been able to purchase in the first place because the original lenders had always planned on reselling those loans onward — risking nothing themselves.

No need to be a real estate professional yourself like Isaac Toussie in order to read the proverbial tea leaves. Given the sheer amount of defaults involved, the market’s understandably flooded with foreclosed homes, which in turn further depress prices in a vicious cycle which the country’s still under, all these years later. That’s not even to mention the other side of the matter, the fraudulent lenders and cynical gamblers involved!

In fact, it is arguable that everyone has had a hand in contributing to the problem we’re now all faced with. But the subprime angle just outlined is the most popularly understood narrative because it is actually the simplest to comprehend. And so two to three years on, what does the real estate picture look like in the United States?

As bleak as ever. Low interest rates have not affected still-tight credit lines. Which means that you now have to be practically perfect in order to qualify for a mortgage. And despite profits at historic highs, businesses refuse to hire. This means an uncertain jobs outlook that has people afraid to make the sinle most expensive purchase they are likely to make in their entire lives.

It all means that though economists officially peg The Great Recession as lasting from 2007 to 2009, Americans are still trying to dig themselves out of its after-effects.

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