With the increased demand for housing, existing house renovations and the built of new homes, the price dropped considerably. The houses that had existing mortgages were no longer worth what the current owners acquired them for. The lending institutions began offering mortgages with low payments at the beginning of the loan’s life making it more attractive to purchase a home right then and there. These financial institutions then proceeded to lower their lending standard to bring more buyers and providing easier access to credit. The new potential buyers did not realize that those promises came with a high cost. These mortgages also came with high yielding mortgage bonds. (Nielsen, 2012) Having more customers pushed the real estate experts to have shorter relationships with the borrowers allowing them to take unnecessary risks. The pricing gap market fueled unrealistic home
With the increased demand for housing, existing house renovations and the built of new homes, the price dropped considerably. The houses that had existing mortgages were no longer worth what the current owners acquired them for. The lending institutions began offering mortgages with low payments at the beginning of the loan’s life making it more attractive to purchase a home right then and there. These financial institutions then proceeded to lower their lending standard to bring more buyers and providing easier access to credit. The new potential buyers did not realize that those promises came with a high cost. These mortgages also came with high yielding mortgage bonds. (Nielsen, 2012) Having more customers pushed the real estate experts to have shorter relationships with the borrowers allowing them to take unnecessary risks. The pricing gap market fueled unrealistic home