While 1.7 million people in California are currently unemployed and while another 46,000 homes in Los Angeles County currently sit in pending foreclosure status, many homeowners now ask themselves - How did we get here?
It's becoming more and more often that you see all the fingers pointing in the direction of the Realtors and other professionals that work in the real estate industry. To all those that believe the Realtors are solely or in part responsible for the housing bubble gone wrong - try again.
While it is true that many fly by night Realtors jumped into the California real estate game with hopes of getting rich quick, it's simply inaccurate to rest the blame of a housing foreclosure bust on the backs of the Realtors. If there was any particular industry that is to be held responsible for the current economic crunch we now find ourselves in, that my friends can be chalked up to none other than the lending institutions. The fact remains that is was the credit and lending institutions that provoked and allowed this train wreck to occur. Lenders were handing out loans to every Tom, Dick, and Harry that lived, breathed, and could sign loan documents. Forget about that little thing known as employment and income. If you had good credit and could breath, you got yourself a loan! Many fell right into the trap. Congratulations, you just qualified to purchase a house! You too can achieve the American Dream! No one would tell you that your American Dream would shortly end up being your American Nightmare. "Don‟t worry about the loan interest rate and payment adjusting in a few years," many lenders told home buyers. Just refinance the loan once you get close to the expiration and by that time you would have tons of equity built up in your home.
Unfortunately, that much awaited and highly anticipated friend called "equity" never showed up at the front door step and those God afoul loans came due. Monthly mortgage payments of $2,000 jumped, in many cases, to $5,000 and $6,000 per month. Families caught flat out with their pants down and the lenders laughed all the way to the bank. Next time you wonder how it is that the housing bubble did finally burst. Just pick up the phone and call the banker that sold you your loan. That is, if he or she hasn't high tailed it to a foreign country or if their phone number still works. You might want to try reaching them in the Virgin Islands, if you don't mind disturbing them from their evening cocktail served beach side.
It's becoming more and more often that you see all the fingers pointing in the direction of the Realtors and other professionals that work in the real estate industry. To all those that believe the Realtors are solely or in part responsible for the housing bubble gone wrong - try again.
While it is true that many fly by night Realtors jumped into the California real estate game with hopes of getting rich quick, it's simply inaccurate to rest the blame of a housing foreclosure bust on the backs of the Realtors. If there was any particular industry that is to be held responsible for the current economic crunch we now find ourselves in, that my friends can be chalked up to none other than the lending institutions. The fact remains that is was the credit and lending institutions that provoked and allowed this train wreck to occur. Lenders were handing out loans to every Tom, Dick, and Harry that lived, breathed, and could sign loan documents. Forget about that little thing known as employment and income. If you had good credit and could breath, you got yourself a loan! Many fell right into the trap. Congratulations, you just qualified to purchase a house! You too can achieve the American Dream! No one would tell you that your American Dream would shortly end up being your American Nightmare. "Don‟t worry about the loan interest rate and payment adjusting in a few years," many lenders told home buyers. Just refinance the loan once you get close to the expiration and by that time you would have tons of equity built up in your home.
Unfortunately, that much awaited and highly anticipated friend called "equity" never showed up at the front door step and those God afoul loans came due. Monthly mortgage payments of $2,000 jumped, in many cases, to $5,000 and $6,000 per month. Families caught flat out with their pants down and the lenders laughed all the way to the bank. Next time you wonder how it is that the housing bubble did finally burst. Just pick up the phone and call the banker that sold you your loan. That is, if he or she hasn't high tailed it to a foreign country or if their phone number still works. You might want to try reaching them in the Virgin Islands, if you don't mind disturbing them from their evening cocktail served beach side.
