What happened? Basically, they made a lot of really bad mortgage loans.
We can argue about why, whether it was the gov't pushing them to do it, or greed on their part, or whatever. But in the end, they made a lot of loans they shouldn't have, and when the housing bubble popped, they got burned badly.
Below is from Wikipedia
2007â€“2012 global financial crises
The 2007â€“2012 global financial crisis, also known as the Global Financial Crisis and 2008 financial crisis, is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s. It resulted in the collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. In many areas, the housing market also suffered, resulting in evictions, foreclosures and prolonged unemployment. The crisis played a significant role in the failure of key businesses, declines in consumer wealth estimated in trillions of US dollars, and a downturn in economic activity leading to the 2008â€“2012 global recession and contributing to the European sovereign-debt crisis.
The bursting of the U.S. housing bubble, which peaked in February 2007, caused the values of securities tied to U.S. real estate pricing to plummet, damaging financial institutions globally. The financial crisis was triggered by a complex interplay of valuation and liquidity problems in the United States banking system in 2008. Â Questions regarding bank solvency, declines in credit availability and damaged investor confidence had an impact on global stock markets, where securities suffered large losses during 2008 and early 2009. Economies worldwide slowed during this period, as credit tightened and international trade declined. Â Governments and central banks responded with unprecedented fiscal stimulus, monetary policy expansion and institutional bailouts. Although there have been aftershocks, the financial crisis itself ended sometime between late-2008 and mid-2009.
According to many analysis and reports, our economy is beginning to recover. Pending sales are up higher than they have been in the last 12 months and house/condo/townhouses prices are actually beginning to CLIMB higher!
Consumer confidence is also on the rise. USA Today reports Consumer Confidence is the highest itâ€™s been in 4.5 years!
July 6th, on CNN, it was reported that many employees are enjoying HIGHER wages and many are being promoted within their companies. Job security is also attributing to Consumer Confidence.
Media has a tendency to report â€œnews hypeâ€ type news. The days of Walter Cronkite reporting is a thing of the past. Cronkite reported the â€œfacts.â€ Today we Hype the News and try to make it as sensational as possible. I hope you found this Blog as merely trying to â€œreportâ€ the facts as they have been presented by many agencies and reports sans â€œhype.â€
Let us look past the â€œhypeâ€ and start seeing the real conditions.Â What have you noticed?Â Â Â
IMPORTANT: If you or someone you know is interested in buying or selling a home in the Palm Desert Area, try searching properties on the same Desert Area MLS Realtorâ€™s use, or give me a callâ€¦.or visit my website at Palm Springs Homes andÂ Estates. I will be happy to give you or your referral my â€œred carpet service.â€ After the sale, I will send you a $50 Gift Certificate towards dinner in a fabulous Palm Springs Area Restaurant so you can celebrate!
Brought to You By Your Favorite Realtor