FDIC

A major cause of our economic woes now is largely due to financial institution’s liberal loan policies, involving high risk real estate mortgages. According to a 2006 report in Harper’s Magazine, almost half of first-time home-buyers gave no down payment as equity for their mortgages in 2005. Single family home loans have reached a total of $2.33 trillion in 2007.

During the recent years, the real estate mortgage rates are resetting higher. The monthly mortgage payments that were so affordable in 2004 or 2005, when the loans were signed, are pushing borrower-homeowners to their limit and beyond. Millions of homeowners financed their dream houses by taking out an adjustable-interest rate mortgage, years ago; some were even already at the edge during those times.