The Housing Disaster And Subsequent Great Recession Of 2007

The Housing Disaster and subsequent Great Recession of 2007 were predicted by several well-known Economists, although it still caught a majority of the Country and World by surprise! I wasn’t prepared for this economic shock either, as I had just finished real estate school and passed my State and National licensing exams during the previous year. It was a tough start to a real estate business but proved valuable in the lessons I learned during those next several years. Although I was fairly â€Å"green† to the business, I could recognize some loan programs and practices that sent chills down my spine and raised the hair on the back of my neck. What were worst of these programs and practices? The overall consensus agrees that risky lending practices and sub-prime mortgages were key influences in the housing disaster. Inflated market and sales prices also played an important role. I am reminded of one such experience. A good friend of mine called me one evening, during the late summer of 2006. He was considering refinancing his current home so he could possibly purchase a second investment home. He explained that his current loan officer had offered a â€Å"great† loan package that would significantly reduce his monthly payments. RED FLAG NUMBER ONE! After reviewing the written information on this loan product, I showed him where he would be paying â€Å"affordable† interest only payments for two years. His monthly payment would increase dramatically after the third year, as he would beShow MoreRelatedThe Recession Of The Great Recession1525 Words   |  7 PagesIn 2007, the United States economy experienced a financial crisis known as the Great Recession, which affected much of the world. It officially lasted from December 2007 to June 2009 and all began with the bursting of an 8 trillion dollar housing bubble. 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