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kasse
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Is it true that the housing bubble was created because the housing market was practically 100% unregulated?
http://www.pbs.org/newshour/bb/business/jan-june09/andrews_05-21.html...PAUL SOLMAN: Andrews applied for, and got, a no-ratio loan, in which his $2,500 monthly payments would consume nearly all his take-home pay.
No-ratio?
EDMUND ANDREWS: A no-ratio mortgage in which literally I left the income space blank.
PAUL SOLMAN: Therefore, there would be no ratio.
EDMUND ANDREWS: Correct, yes, because there was an issue of my debt-to-income ratio. But if you don't have any income that you're declaring, you have no debt-to-income ratio. Problem solved. Even at the time, I'm going, "I can't believe this. Is this a great country or what?"...
kasse said:Is it true that the housing bubble was created because the housing market was practically 100% unregulated?
The housing bubble refers to a period of rapid increase in housing prices, followed by a sharp decline, resulting in a collapse of the housing market. This is often accompanied by excessive speculation and risky lending practices.
The housing bubble was caused by a combination of factors, including low interest rates, easy access to credit, and high demand for housing. This led to an increase in home prices, making it appear as though real estate was a safe investment. However, this was not sustainable and eventually led to a crash.
The housing bubble had far-reaching effects, including the collapse of the housing market, the failure of many subprime mortgage lenders, and the global financial crisis of 2008. It also resulted in widespread foreclosures, loss of jobs, and a decline in consumer spending.
The government responded to the housing bubble by implementing policies to help stabilize the housing market, such as the Troubled Asset Relief Program (TARP) and the Home Affordable Modification Program (HAMP). They also increased regulations on the mortgage industry to prevent similar crises from occurring in the future.
It is difficult to predict whether another housing bubble will occur in the future. However, the government has taken steps to prevent another crisis, and the housing market has shown signs of recovery. It is important for individuals and lenders to be cautious and responsible in their housing decisions to avoid another bubble.