I've been doing a lot of reading on BP, listened to many podcasts, read some investing books, and done a little research outside of BP over the past year. Of everything I have learned I still have a few questions regarding the market crash of 07-09.
1. Banks had risky lending practices (lending 100% ARV some times more)
2. Market was hot so lots of speculation in terms of investment practices
3. Adjustable Interest rates where a thing for the uneducated bc of the low initial %
So for the general consumer they bought a house they couldn't afford bc of the great rates and financing... Market started tanking pushing interest rates up causing the consumer to not be able to afford the new nice house so they foreclosed or they lost their job causing them to foreclose.
Investors bought on speculation that the market will continue to rise and they could make cash quick in a couple of years after their appraisal jumps some. Then when the market crashed their "new investments" lost value and they foreclosed.
So I think I have an understanding of what happened but I still don't know the break down of what "investors" lost it all and what "investors" survived the crash. And why they lost it and why they hung in there ( other than the reasons stated above). I know a lot of people investing today did well from the crash due to jumping into the real estate after the crash and buying up houses but what happened to everyone that was in the hustle before everything when to the toilet?
I know people who started before the crash and survived or grew their portfolio. Like you said, those who were way over - leveraged lost houses to the banks. Some could have continued to make payments, especially homeowners, but walked away.
I hate to say it but I think this is a topic most people would avoid... Based on the fact that it could cut a large percent of investors out of the business. History shows that it repeated its left. Bump.
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