How could record foreclosures and Mortgage...

[Chi Guy]

...Lender bankruptcies occur in the "booming" economy? Is it because this inflated economy is funded my deficit spending and the bubble is due to burst?

[Harley]

Predatory lending practices, ARM's, interest only loans, people borrowing more than they can afford and not doing their homework on loan options (personal responsibility).
The economy is strong, unemployment is low and existing home sales are at a three year high.
The inflated economy your are talking about was the last administration when the fake economy and the dot.com / tech boom burst, all while social security was being robbed blind.

[junglejoe]

The boom slowed down in the US.

But, the world economy is soaring!!!

Lots of foolish people paid prices that were way too high. It would have been as if people had borrowed a ton of money to invest in Excite or AOL before they lost 90% of their value.

[Mathew H]

Becuase North America lives off of credit. People don't know how to spend their money anymore, but they know how to rack up quite the debt.

Let's face it, banks encoruage it, they LOVE the interest that can be made. We live in a time where people can have zero down on a house!! You need alright credit, but it's not as strict as it used to be. In this cut throat environment, banks encourage debt... unfortunatley it's just got out of control.

[karl k]

yes it is because of the booming economy.
low unemployment, low interest rates and more first time home buyers then ever in history made lenders bold and confident. this drove prices higher than value and tempted both lenders and buyers into risks.
so yes, the housing market was a bubble due to burst and yes, it was a result (at least in part) to our booming economy whose fundamental indicators range from good to record breaking.
the deficit went down over the last three years as the housing market soared to record heights. there is probably no correlation, but if there is any it is the opposite of what you infer.

[Bush Invented the Google]

Because the people who call it a "booming" economy think that, since THEY haven't been personally affected by the bad economy, it must be great.

[suthrnlyts]

Much of it has to do with unscrupulous lending institutions and people blindly getting balloon mortgages, never anticipating that the interests rates would go up. Do you know what a mere one or two percent increase can do to a balloon mortgage?

It's a combination of ignorance, people who have overextended themselves and lenders who sold a bill of goods.

It's NOT the economy. Yet.

[Osama W. Bush #99]

Because The Economy Is Not Booming.

[tx_trotter95]

Same question, umpteenth version. Yawn.

Whatever happened to possibly holding the borrowers responsible for not knowing what the heck they were doing?

[877YouKeep]

I am far from chicken little here but have you seen the market lately? Foreclosures in the US are actually having an impact on the World economy. Banks because of the lax underwriting and poor lending judgments have really negatively impacted the world economy. I was speaking to a buddy last night in England and he started asking questions about foreclosures and the world banking. I am far from an expert on the world bank and global economy but I see a negative impact on US economy which is now effecting the markets overseas.
I know politics have some affect on lending and economies but lets keep to subject Loss Mitigation, I am sure the admin of the site does not want people getting their panties wadded here about W and Clinton... here is an ice breaker, did you know that many of the companies that are teaching loss mitigation, ie. sales so they can do the loss mitigation work, are using techniques for loss mitigation from about 15 to 20 years ago? Let's get with the program guys. Here is one I had to laugh at, I paid xxx dollars to go into a loss mitigation office to see how it was run, not sure what that was all about but last time I walked through the doors I had to swipe my badge. If I forgot my badge I did not get in without my management approval not even a peer could sign me in at the guard station. There is no company that is going to let that happen I do not even think small servicer's will allow and they are not given permission to make judgment calls, delegated.