Unfortunately over the past few years there were many lenders (almost all) who were willing to give anyone who could fog a mirror a mortgage. I was even told by one lender myself a few years ago to go ahead and get an interest free adjustable rate loan. His reasoning...the value would climb so fast that a refinancing would be possible before the interest readjusted. That was the environment that created today's environment.
With so many buyers "qualifying" for mortgages the only thing that could happen was for prices to climb. After all, when you have more buyers than sellers then the price will climb. Thus, home prices rose faster than they should. Somewhere along the way if interest rates would have climbed a bit then the run up would have been moderated.
Now I hear all the talking heads blaming those who were led into these mortgages. In the end the little guy will be the one who suffers.
Will things work out? Yes, but how many will be hurt in the process?
Gary Waters, Florida licensed real estate agent, Century 21 Baytree Realty, Rockledge, Florida.