People have told me that there is a big problem in the housing market in the United States right now but I'm not really sure what the big deal is.
2007-10-06 13:55:55 · 3 answers · asked by JumpingRooftops 2 in Business & Finance ➔ Other - Business & Finance
Because the cost of homes is so high, many many people bought homes with variable interest rates or other gimmicks that kept the payments low for the first few years. Loan agents sometimes doctored their applications to make them look more worthy than they were, and they ended up with loan that they really could not afford. Rates have gone up and people are having to give up their homes and mortgages. The mortgage companies and other companies that buy these loans are taking big losses. The losses are rippling though the financial sector, even internationally.
2007-10-06 14:01:46 · answer #1 · answered by Baccheus 7 · 1⤊ 0⤋
Mortgage companies got greedy and gave high risk mortgages to people who could not afford to pay those mortgages over the long run. A large percentage of those people had trouble paying, and their houses went into foreclosure. Now the mortgage companies are losing heaps of money and a lot of housing markets are being flooded with foreclosed homes.
2007-10-06 14:03:28 · answer #2 · answered by Stephanie C 5 · 1⤊ 0⤋
Massive foreclosures and prices falling like rocks ,
Because people were crazy and believed real estate salesman who told them prices Always go up ,
And let them have loans with Adjustable Rates ,
That started real low but are now resetting and raising their monthly payments as much as a $1000 a month more .
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2007-10-06 14:00:06 · answer #3 · answered by kate 7 · 1⤊ 0⤋