How the Mortgage Crisis Happened

If you are wondering how the mortgage crisis happened, it can be summed up in one word - GREED. If you are going to make money off of something would you prevent it from happening even if you knew it wasn't in the best interest of anyone concerned? If a person wanted to buy a house and their debt to income ratio was too high and they didn't have any savings these people would still be able to get a loan through a sub prime lender. They might have been able to repay the loan for a while but once they got laid off, or got hurt on the job or just got fired, they no longer had the means of repaying their mortgage.

You can point your finger at everyone! The people that wanted the loan are definitely to blame. They wanted houses and the only way to get one was to get a sub prime loan. Then you can also blame the real estate agents, property appraisers, and even the sellers of the homes. Whatever you do be sure to place the most blame on the banks themselves and then the subprime lenders.

The real estate agent showed the most expensive house to get the most commission on the sale. The property appraiser had to say the property was worth more than the selling amount so the loan would go through and he would get paid and get more jobs from the realtors. The sellers over priced their homes and put them on the market for what the realtors said so they could get more money off of the sale of the house. As you can see everyone is to blame so now we need to find a solution.