Homeowners all across the US found themselves going through foreclosure after the market crash of 2008. But if we dig a little deeper, it is clear that the whole crisis was caused not by consumers but by the ultra-capitalist mentality which inflated the prices of real estate to an unprecedented point. It is even more clear that the US government failed to recognize the signs of the imminent demise of such an important sector of the economy.
Easy Money Saturated the Market
Banks and other lending institutions created the problem by carelessly lending money, injecting trillions into the marketplace and making money too available for real estate purchases, thus inflating the price of property to irresponsible heights.
Many honest and hardworking people took these easy loans not because of greed, but because it was the only way they could find to acquire housing. Not suspecting what was in store a few months later, honest people lost everything. Again, due to the irresponsible behavior of greedy ultra-capitalist bankers combined with the lack of government supervision.
The Real Estate Gold Rush
Millions ended up going to foreclosure. However, some savvy investors started to capitalize on the situation. Professional house buyers implemented programs that allowed homeowners to sell their homes to them, recuperating just a part of their investment with some sell house fast scheme, such as a short sale or lease option. We Buy Houses posters where plastered through most cities, and again, private American companies solved the problem.
I wonder what would have happened if no one bought these houses and let the banks carry their inventory until they apologized. What I am trying to say is: Banks and Government are messy, give the power to the people and we shall see this nation prosper.