"In 2007, for example, there were 17,000 foreclosures in Cleveland and its surrounding county, a conurbation roughly the size of Manchester; five years ago there were just a few hundred. During the first 11 weeks of 2008, there have been a further 3,132, sparking fears that this year will be the worst yet."
"As of January 2008, Stockton, Calif. (pop. 280,000), had 4,200 homes in default or foreclosure, with bad loans totaling a staggering $1.4 billion"
The Reagan administration and Congress stopped regulating the nation's financial institutions. Commercial banks and savings-and-loans used their political clout, and their campaign contributions to get Congress to loosen restrictions on the kinds of loans they could make. This opened the door up to abuse of the whole Lending market. Banks, lenders, morgage brokers, and real estate agents everywhere went to work on the public to get them to take the bait. many took the bait, and got bit hard with ruined credit, and homeless people everywhere.
Why are other Nations also suffering from the foreclosure meltdown? Because when the lenders saw what was happening they took some of the loans that were in bad shape and sold them to who ever would purchase them, and that included lenders overseas. So the market will effect many Nations, instead of just the USA. The top lenders in this meltdown has already gone belly up. Many more will follow.
This is not the first time this meltdown has accured. It happened back in the great depression too. Also of note is the fact that the Government put new rules in place to keep it from happening again. But oops! Thanks to the Reagan administration and Congress we get a second taste of what happens when the banks run wild.
Now on to a few things you must know. This past few weeks horror stories on how people were taken advantage of are coming out in drones.
Like story's of people that income was inflated by the broker to make them look like they were worthy of getting the loan. No proof of income, just write it down in the contract, make it look good for the bank, it's not like the bank cares any way. Many did not know what type of loan they were getting either, and those that did ask were told they were getting a good loan and their payments would always be such and such, which was not true. Also it was not just brokers that was in on this is was also the lending institutions that wrote out the most nutty of contracts for customers that you ever did see. Like not allowing the people to make a extra payment, if they did make a extra payment then their was a rate increase put on them, and stiffing them with a house that was inflated to as much as 500% to 700% higher than what the home was worth. The people that got the loan could not even put a for sale sign up because of this. So homes that sold for $175,000.00 were really only worth $22,000.00. Oh and don't forget the inflated home insurance that was crappy but the home owner paid dearly for it. This is just the tip of the iceburg people! I am sure many more home owners will step forward and tell how they got shamed by the brokers and the bankers.