Easy credit and the belief that home prices would continue to go up was driving real estate prices higher each month. The California real estate market was acting very much like the Wild West. No one thought about consequences and the potential risks they were taking. The thought by many homeowners that home prices would never go down was the word on the street. During this period the motto was “just about anything goes” and just about everyone got a loan. If you had a pulse and fogged a mirror then you could get a loan. If you had bad credit, no problem, there was a loan program for you. No income, no worry there was a loan for your situation too. No questions about credit, income or where the borrowers got the down payment. Federal Reserve.
In 2006 at the height of the real estate market the estimated value of residential real estate in the United States according to the Federal Reserve Board was over 24 trillion dollars. Written out it looks like this: $24,000,000,000,000. Federal Reserve.
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