The Market For Purchasing And Selling Houses Collapsed

In 2008, the market for purchasing and selling houses collapsed. Previous to 2008, speaking specifically between 2000 to 2006, many housing loan companies were offering a low interest rates, which lead to many lenders approving loan applications to individuals who had low or poor credit. When the collapse began, the once-low interest rates increased dramatically, causing many of those individuals were unable to keep up with their payments, which resulted in the foreclosure of their homes. To the extent of this dilemma, many banks went bankrupt, which lead to a number of Wall Street firms in taking a loss. It seems unethical for lenders to approve a Subprime loan, or a high-interest loan issued to individuals that have poor credit score. It is to be understood that the lender will initiate a higher interest rate to those individual(s) to protect the lender themselves in the event that a nonpayment may occur. How does that affect the individual(s)? How is it feasible for a lender to charge high interest rates to a person with low credit score? This affects the person(s) that were approved immensely. There are many different types of homebuyers and there are many reasons for individuals to have low credit scores. For the sake of this essay, the focus will be on lower income individuals that are â€Å"money-smart†, who could not build credit due to the fact that they have never been able to take out a serious loan. The silver lining for the lenders is that no matter how low theShow MoreRelatedHousing Market And The Housing Crisis1272 Words   |  6 PagesIt has been 7 years since the housing bubble burst and the financial systems collapsed back in 2008. Since then, some will say that the housing market, as a majority, has healed and regained footing but is that entirely accurate? 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