[Ice]

During the housing boom, mortgage lenders were offering risky loans with teaser rates that made initial monthly payments very, very affordable for huge houses. Imagine getting a 600,000 loan for only 1100 per month. Also, imagine that you didn't need to prove your income. Lenders would take an application, and you tell them you make 85,000 per year, then when your loan docs are printed, your income says 125,000. The loan agent did that just so your loan would get through underwriting so they'd get their commission and you'd look like you can afford the loan. They just manipulated numbers any way they had to in order for ratios to be acceptable for underwriters to approve the loans. Since people were snapping up houses they couldn't afford, and snapping them up fast, it created a false demand for expensive housing. So the prices went up even higher and in order to loan on them the loans got riskier and riskier. Millions and millions of Americans were loaned money on homes they couldn't afford. More millions were taking out home equity loans up to 125% of their home's value. This was standard procedure with lenders. But, after rate increases and loans readjusting, these same people can now not afford the high payment on the houses they bought. People's payments have gone from around 1500 per month up to 4000 per month now. That is a crazy jump in payment. For higher end houses, those in the 800,000 and up range, the payments are even worse. Between very agressive lending tactics and Americans wanting to keep up with the Jones' and have a picture of wealth, we've ended up here.

If you purchased within your means, you will be largly unaffected by this. My home has been and always will be one I can afford. The only reason I'm selling is because I'd rather have a single story on a larger lot. I don't see my house selling anytime soon though. But I could stay here and make my payment forever regardless of what the housing market does.