From the course: Economics for Everyone: Housing Markets in Crisis

Unlock the full course today

Join today to access over 22,600 courses taught by industry experts or purchase this course individually.

Great Recession and the housing crisis

Great Recession and the housing crisis

From the course: Economics for Everyone: Housing Markets in Crisis

Start my 1-month free trial

Great Recession and the housing crisis

“

- My advice to anyone about housing is don't let your house get foreclosed on, but there are always exceptions to every rule. During the Great Recession, I knew people who walked away from houses they had mortgages up. They could have made the payments, but they chose not to. The reason that they allowed the banks to foreclose on their homes? Well, simple enough. Even with the money they put as a down payment and payments they had made over years, they were upside down in the homes. In other words, if they sold the house, they would still owe the bank money. They had essentially negative equity in their home. That's been one of the few times in history where, if you find yourself in a tough position with housing, it would have been worth it for some people to walk away. Now, those folks who did walk away still had that follow them on their credit report for many, many years. And it hurts some people's ability to buy…

Contents