Mortgage Crisis

During the years leading up to the mortgage crisis in September of 2009, lenders seemed to be finding any reason they could to lend money to people in order to help the applicants go after the American Dream. Purchasing a home, putting down roots, and beginning a family seems to have been one of the main goals of most Americans. At least at one time it was. Banks and lenders in general took awful advantage of this causing an enormous mess that will take years to correct.
People looking to own a piece of America for themselves approached banks and lenders seeking opportunity hoping that they could start a chapter in their lives that would be a spring board into their future. Banks and lenders created rules for loan applications people would fill out as the first step toward home ownership. The applicant must have so many years of stable employment. They must earn a certain percentage each month above and beyond their mortgage payment. They should be married if going into the loan with another person (not a hard and fast rule). All of these rules were intended to help guarantee that the bank or lender would see a return on their investment. If all these rules are taken together and met by the applicant it is not a far leap to assume that the applicants are stable individuals that will not default on their loans and the bank would in fact see a return on their investment. However, two things happened to work against the loan companies and banks. The rules not being adhered to and the unemployment spike that occurred immediately before the mortgage crisis blew wide open worked together to completely turn the housing market upside down.
In an effort to get rid of the high risk loans before the situation gets too bad the unscrupulous lenders sold the loans to other investors to pass the buck along. This created a massive crisis with many of the high risk loans ending up on the plates of larger lending groups which eventually when things when sour needed the help of the government to make a recovery. It will take years for the housing market to recover from this crisis. The immediate problem in some people’s view is to learn a lesson. After all, if there is nothing to learn from a situation, it will just occur again. There is a moral undertone to this problem. Honesty, integrity, and a view of credit as a person’s good name being what induces others to loan them things coupled with pride in one’s good name are in desperate need of a come back in the American Dream or else there won’t be more left to dream about.