So what exactly is this mortgage meltdown that is being discussed all throughout the country on the news, in the papers, on talk shows, etc...? Why are we going through this mortgage meltdown and what is the cause of all of the problems in the mortgage industry right now? How will this effect me? Read throughout this page to find these answers and more.

The mortgage meltdown may have its most significant impact on borrowers who meet the following criteria:

1. Have less than a 720 FICO credit score or any mortgage lates
2. and used stated income loan programs
3. to obtain adjustable rate mortgages with short term "teaser" periods
4. in high cost or high growth areas
5. such as most of California, Florida, Arizona, Nevada, New Jersey,
6. and any other state where housing values are declining due to economic factors

If you meet some or all of these criteria, now is the time to plan ahead and avert potential financial disaster. If you have substantial equity in your home valued at $200,000 or more, contact our financing advisors for a no obligation assessment of your situation at 414-303-1215

The mortgage meltdown and credit crisis is a result of the overexpansion of credit the last five years. Too many loans were made to poor borrowers that may not repay their mortgages. Lending standards have increased and credit will be more expensive going forward.

Borrowers who bought at the top of the real estate bubble with adjustable mortgages also contributed heavily to the mortgage meltdown. When there adjustable mortgages began to increase many soon found out there houses were worth less then they had paid at the real estate bubbles peak. this decrease in value made refinancing impossible for many home owners and the increasing mortgage payments led them into foreclosure.

Relaxed credit standards allowed the U.S. housing market to remain strong in the early portion of this decade. In an appreciating real estate market, those who cannot pay their mortgage or consumer credit can always refinance or sell their home as they have sufficient equity due to the home's appreciation. When home's stop appreciating, that is when is when the problems begin: those who cannot any longer afford their debts nop longer have the option of selling or simply refinancing on their homes due to a lack of equity.

 

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