How Now Brown Cow
What do you do when you have a mortgage worth more than the property? That is the dilemma facing not only homeowners but their lenders as well. And it is what caused The Great Recession, when the housing buble finally burst. What happened was that people who normally would never have had any business being homeowners was able to get subprime loans that lenders never meant to hold onto themselves, selling them instead to someone else in the manner of a Ponzi Scheme.
You don’t have to be an industry insider such as Isaac Toussie to see the writing on the wall about this one. As the number of loans defaulted, foreclosed homes began flooding the market, depressing prices and making even more mortgages worth more than the homes they were taken out to purchase, compounding the dilemma. And that’s only a small part of the proverbial big picture, which is mostly a portrait of cynical gamabling and downright deception!
In fact, it is arguable that everyone has had a hand in contributing to the problem we’re now all faced with. Being easy to understand, however, has made most people focus on this matter of subprime loans, and even exclusively on the lenders and borrowers. For all that, what does the national outlook look like now?
Bad, very similar to years past. Low interest rates have not affected still-tight credit lines. So all those foreclosed homes are just sitting there, often boarded-up and abandoned. 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.
So for all the talk about The Great Recession being over, it’s 2011 and no citizen imagines that the immediate future is going to be any different.