Real estate is not immune to market conditions. If history of foreclosure is anything to go by, real estate, same as mere mortals are affected by constant ups and downs of economy. The US foreclosure story goes back to early 1930’s. The Great Depression hit US with resounding crash of the Wall Street Crash in October, 1929. Sweeping like unstoppable wave it bowled over US economy, crushing employment, housing and bank markets. Coincident sand storm and draught season hitting US with vengeance added to misery of farmers. Resulting fallout marked the beginning of a decade of high unemployment, low profits, deflation, and yes Bank REO first recorded highs in US history.The jobless and farms hemorrhaging money could not finance the mortgages and thousands of houses and farms went to foreclosure. Homeowners and farmers alike pledged their assets as security on the loans. Desperation and loan rates flew high, wages and income run low and many were left with little choice but to sell their homes and farms to manage incurring debts. In rates similar to those observed in today’s recession nearly 0.73 percent of all housing in the US ended up as bank REO. While some attempts were made to slow down the foreclosure on agricultural sector with passing of the first major farm legislation, the Agricultural Adjustment Act of 1933, it was but a drop in bucket. Most went under anyway, ended up ad bank REO’s and more to boot, the federal government’s agriculture control brought more headache than good on the long
No comments:
Post a Comment