The Mortgage Crisis Helps To Pave The Way For Bankruptcy

Concord bankruptcy, Fremont bankruptcy, and California bankruptcies in general have

been on the rise for the past five years without a lot of hope in the near futures for change.

The housing market has direct ties to our national economy. The U.S. mortgage crisis was an early indicator of hard times to come. There is plenty of blame to pass around and plenty of places to put it.

According to Wikipedia "The ratio of lower-quality subprime mortgage originated rose from the historical 8% or lower, to approximately 20% from 2004-2006". They also state that as much as 90% were from adjustable-rate mortgages. Between the broader based lending standards and mortgages for high risk increased and the average American's increasingly indebtedness it was a recipe sure to implode.

American's were on spending binges never seen in their history. The country's ratio of disposable personal income rose from 77% to 127% in 2006. It doesn't take an accountant to see that those numbers don't add up. Maybe that same accountant should let the Washington D.C. know that their numbers don't add up either!

The medium price of homes rose sharply in the mid- 2006 and then quickly started to plummet. People were underwater in their mortgages with an increased amount of debt to go along with it. Refinanced were becoming more difficult as financial firms were struggling. More and more people were seeing the inside of a Concord bankruptcy court or a Fremont bankruptcy court, the California bankruptcy was hitting an all time high and those numbers continue to increase today.

California especially hard hit due to the collapse of Enron, Lehman Brothers, Goldman's Sachs, Fannie Mae and other financial giants. The housing bubble popped big time in California leaving many unemployed and most upside down in their home loans.

While the problem is complex and widespread, Senator McCain may be right in his observation that the root cause was loose credit and greed. He is further quoted as saying, "I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers".

While the problem isn't going away anytime soon, the Oakland bankruptcy attorneys along with all the others are keeping busy. Creative mortgages, especially adjustable rate mortgages, borrowers overextending, speculation, predatory lending, overbuilding, bad housing policies, banks entering the mortgage market, and mortgage brokers, corruption and greed all helped move the crises to the front of the stage. Unnatural gains can't last forever especially when they are built on a house of cards, when those cards come tumbling down, many people were left with nothing.

by: Art Gib

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