The recent spike in the foreclosure rate has been a worrying and confusing for many Americans. Millions have been affected by what many economists and industry experts are terming a “financial crisis” and even a “meltdown,” but few are entirely aware of the market forces that are behind the economic fluctuations. A general understanding of what happened can help you make responsible financial decisions in the future, and can help prevent you protect your home and investments.
A Brief Foreclosure Timeline
In many ways, the foreclosure crisis stems from the rise in subprime mortgages that lending institutions began offering over the past ten years. Subprime mortgages are loans made under the prime rate to borrowers who otherwise wouldn’t qualify for loans due to a bad credit rating or lack of finances.
The course of events during the housing market collapse was as follows:
- The booming housing market’s speculating investors eventually caused the housing bubble to burst
- Mortgage rates rose dramatically as the boom tapered off
- The rising mortgage rates locked out new investors, including new homeowners
- Speculative investors dropped out entirely, which lowered investor confidence
- Recreation home buyers and trade-up buyers stopped buying, ensuring the market sell-off
The overall effect was to depress the market, causing many Americans to lose their houses. In this market especially, it is important to fight foreclosure and safeguard your possessions.
If you or someone you love is facing foreclosure, the Milwaukee foreclosure defense attorneys of the DeLadurantey Law Office, LLC may be able to help you keep your home. To learn more about how we can help, contact us today by calling 414-377-0518.