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Who stands to profit from the current US Housing Market? |
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Written by Suziclue
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The current housing market in the US has had its largest fall for some decades now; many people are fearing the worst as many homes are being foreclosed by major banks. It would appear that since the early quarter of 2007 many top economists were aware that there was going to be a huge slump in the US economy. Many of which didn't realize how big and catastrophic the fall was actually going to be.
Many people, who at one point were living the "American dream" through real estate and property development, are now finding themselves in a lot of debt and many are seeing their properties being swallowed by the fat cats of all the major US banks. It's true that greed leads to disasters as it is quite evident the majority of investors who purchased homes on the basis that it will rise forever are now suffering major losses.
Many of the banks and mortgage providers would lend to untrustworthy and low credit scored customers. At times, lenders would lend money to customers for loans that were over 10 times their annual salary. Which as we can all see; we are all now feeling the pinch because of it. The fact that more time is not given to families who are facing foreclosure and are behind in their payment is a tragic situation. The government’s rescue plan is like pouring salt on the wound as it has not helped the consumers but instead has gone into the coffers of the banks; earning interest while many are still facing foreclosures.
So would now be a time to invest in real estate and fight back against the financial crisis? Well many economists say that the economy will continue to shrink further; a lot more money from the state would need to be put in to help the families that are struggling to pay back the loans.
For some this is the perfect time to take advantage of the recession, many big real estate investors are having a great time. With many of them getting up to 28% off the original asking price and some extremely fortunate investors is taking advantage of the homes that were foreclosed, as the banks want to recoup the money that they have lost through bad lending. In some cases some investors are buying large families homes from right across the USA for a fraction of the price through a fast sale, money recoup program. After buying so many cut priced homes, these people you could say are living the "American dream".
I believe the people who stand to survive in this climate would be the people who have carefully looked after their credit and paid bills on time. As many banks will now think twice who they will lend money too.
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