The economy of United States has always been very buoyant due to a very high employment rate and low interest rates. A housing bubble was developing over the years, which ultimately burst giving rise to the subprime mortgage crisis.
Since getting credit and mortgage loan had become easier, the market condition was very ripe for buying a property. There were subprime lenders who gave loan to consumers who did not deserve to get one. Many real estate operators had left no stones unturned to manipulate eligibility documents for a mortgage loan.
People thought that they could refinance their mortgage in the event of default. As long as the interest rates were down, buying a property still seemed feasible. Instances of loan defaults increased and number of foreclosures escalated in an alarming rate.
Many companies had to close down their shutters due to bad lending practices. For e.g, BNC Mortgage LLC, a subprime lending unit of Lehman Brothers had to close down due to the economic slowdown.
Since getting credit and mortgage loan had become easier, the market condition was very ripe for buying a property. There were subprime lenders who gave loan to consumers who did not deserve to get one. Many real estate operators had left no stones unturned to manipulate eligibility documents for a mortgage loan.
People thought that they could refinance their mortgage in the event of default. As long as the interest rates were down, buying a property still seemed feasible. Instances of loan defaults increased and number of foreclosures escalated in an alarming rate.
Many companies had to close down their shutters due to bad lending practices. For e.g, BNC Mortgage LLC, a subprime lending unit of Lehman Brothers had to close down due to the economic slowdown.
2 comments:
Loan repayment plan can help to reduce foreclosures and help the market. Bad credit score, debt, foreclosures might bring the enonomy to worst stage.
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