I want to offer my knowledge about the current mortgage situation we are in. Many homes( one million plus) in the U.S. are either in foreclosure or pre-foreclosure. The housing industry is going through a very difficult time. I would like everyone to stop and think why we are in this mess.

Let me start by going back 4-5 years before lenders were offering 100% loans with a 500 credit score. I am relating from what I have learned being a mortgage broker in Illinois for 15 years. The only 100% mortgage was a VA loan, FHA was and is a 97% loan, most of the other loans were 90-95& depending on your credit. All of a sudden lenders came up with 2 yr, 3 yr, option arms, interest only loans. The rates were the lowest in about 50yrs. and people should have known the rates were going to go back up at a latter date when the arms came due. Not only the rates but also the credit requirements  to qualify for a loan when the arm came due. Last, the BK laws have been changed. We are in this mess for the above reasons.

Please comment and if you would like me to explain this in more detail let me know.

Thanks, Bruce