Have you ever stopped to really think why the real estate market is in such an uproar? So many people have been evicted and so many more have lost their homes to foreclosure. It is a very sad state we are in when good, hard working people are thrown to the streets. Why has all this happened? Although this is not a very easy question to answer, and there are many parts to the equation, we can shed some light onto a big contributor of this current mess.

From the years 2005-2007, it was a time where people where buying homes left and right. Everyone, even the banks, thought that the real estate market was on a continual upswing. In fact, it had been on an upswing for years and years on end with no signs of faltering. There was no reason why people thought that the wonderful real estate market would end. In this, people got greedy. Everyone got greedy- not just the people making money off the deal.

Surprisingly enough, normal people started to take the part of "investor". What they were doing, however, was not real estate investing at all. People were spending their retirement money along with life saving to purchase property that was increasing in value so much that they were paying up to three times what it was actually worth. In some cases, they over paid even more. The only thing people saw when they were buying multiple properties is the value increasing over and over. This made them want to buy more and more. They did not want to miss out on the opportunity. Where did this lead them?

It lead them to a situation where the properties they bought were not even half of what they paid. They also saw the ARM's they had, increase and plateau in interest rate price. The balloon payments that seemed great at first did just what it said it would; they blew up to a huge price they could not afford.

They major problem with this is the fact that they should have never been given the loan. If correct loan processes were followed, we would be in a better position than we are now. This is because most of these people would have never been given the loan because they simply could not afford it. What the bank was counting on did not happen. They were counting on the market to keep increasing. When it didn't, the real estate market fell.

Now, we are trying to pick up the pieces of this shattered market, not in hopes of a pot of gold at the end of the rainbow, but stability. Some loans have become nonexistent in this current real estate market due to this problem. Such a loan would be a no doc loan that was absurdly abused during the previous years that led to this disaster. We can only now wait for the market to level off and hold on for more twists and turns, as this is definitely not over yet.