Financial Crisis - Mortgage Fraud or Just Greed?
People can speculate all they want and make up any excuse concerning the financial crisis the nation is experiencing at this very moment. So why and how did it really happen? Who is to blame?
Typical real estate recessions happen when demand for houses decreases. In the wake of every real estate decline comes an inevitable shrinking of demand for loans and that eventually hurts the mortgage industry. But today’s crisis is just the opposite. It started with a failure of the mortgage industry – which looked to Wall Street instead of real estate for its sustenance this time around – and leaked back into the real estate market in two abnormal ways.
- First it caused the home price bubble to expand artificially, as homeowners bought houses that cost more than they could afford because lenders gave them money and encouraged them to do so.
- Next it helped pull valuable equity out of homes through low down payment mortgages and cash-out refinances that were pushed on homeowners without regard to repayment ability.
Read the full article at BoiseRealEstateInfo.net titled The Great Mortgage Fraud Conspiracy Unravels in 2008
