During the housing boom that lasted from about 2001 through much of 2006, mortgage lenders gave out loans to just about anyone who applied. Or at least it seemed that way. Maybe that's why the national home ownership rate soared to 69 percent as late as 2006, according to the U.S. Census Bureau.
It turned out that many of those mortgage loans that lenders passed out during the boom were suspect. RealtyTrac, an online provider of real estate data, said that housing foreclosure filings reached 2.3 million in 2008. That's an increase of 81 percent from 2007, and an all-time high. Many of these foreclosures are a direct result of mortgage lenders passing out home loans to people whose financial situations should have precluded them from ever taking on the responsibility of owning a home.
Mortgage Lenders More Cautious Today
Today's mortgage lenders are a lot more cautious about who they approve for mortgage loans. During the heyday of the housing boom, even borrowers with suspect credit -- not to mention high levels of debt and shaky job histories -- were able to obtain mortgage loans with low interest rates.
