Housing Crisis Usa
When the housing bubble burst in 2007, many did not anticipate the chain of events that would follow. The unprecedented economic climate there on after would create uncertainty amongst U.S. constituents. The failure of individuals and institutions to see the disastrous costs of lax lending standards and politicization of owning a home has led me to believe that these entities didn’t quite understand the trade-offs involved. There is no sole entity to blame for the housing crisis. Yet, typically in the media, only the banks are blamed for the financial mess, but various institutions and individuals influenced the outcome of housing crisis. Homes needed to become affordable and obtainable according to politicians. Creative financing and quotas would be the means of doing so. After the bust these politicians and leaders washed their hands and spoke out against the very mess they created. The efficacy of remedies such as the Trouble Asset Relief Program enacted by the Bush Administration still remains under debate. With so much uncertainty about the housing market and the economy at large, it’s difficult for the economy to function the way it did pre-2006. The prospect of finally being able to own a home led one to forget about the potential consequences of the expanded accessibility of mortgage loans. The deflation of the housing bubble and it’s consequences are clear: foreclosures, excessively high cost bailouts, unemployment, and general economic uncertainty.
Owning a home has been idealized to be the American Dream in the U.S. and for this reason there has been economic and political forces making it easier for an American to own a home. The epicenter of the housing boom and bust were two enterprises known as Fannie Mae and Freddie Mac. I, like many others, were not aware of their existence until the house of cards fell. Fannie Mae and Freddie Mac, two government-owned enterprises, were institutions, which bought one third of the mortgages in the U.S.