Housing Conflict And The Housing Crisis

2609 WordsSep 2, 201411 Pages
Housing Conflict Keith Blades University of La Verne College of Business and Public Management MGMT 359 Michael Worden 7 March 2011 Housing Conflict The American dream, most people want to live it, start a career, get married, have a nice family, buy a house, and live happily ever after, right? Wrong. For a great majority of people in America, it’s more like the American nightmare since a housing crisis occurred which has rocked this country and will continue for years to come. This paper will cover the housing bubble that inflated during the past several years, the burst of that bubble, and the negative effects that could last for many years. The Housing Bubble Inflation A generation ago, lenders held onto mortgage loans until they were repaid, and retained a relationship with the borrower and an interest in their financial wellbeing. That changed considerably at the start of the 21st century. The modern, high-risk mortgage market gained its first head of steam in the 1990s, and its origin lies primarily in a string of deregulatory policy decisions over the last three decades. High-risk lending passed through two boom periods, the first one in the late 1990’s as well as the larger, second one in the 2000’s. The first boom was marked by a surge in subprime refinance lending. The second included both subprime home purchase loans and refinance loans and they grew rapidly after 2001 (Marcuse, 2009, p.351). Together a new class of alternative or

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