The California Real Estate Meltdown

Paper Summary:

This paper examines California's real estate market crisis and what has now become known as their mortgage meltdown. It discusses the current and overwhelming market condition challenges that exist and how they have affected the California mortgage situation. The paper concludes by briefly examining the supposed spike in home sales in California over the past two months.

From the Paper:

"In the mean time, economic woes continue to correlate directly to that which is transpiring in the housing markets of California and elsewhere. Ultimately, this is indicative of what has occurred and what continues to occur to the extreme detriment of American stability. Namely, the persistence of lenders to hook on to poor candidates for borrowing has passed on the considerable damage to our economy of unnumbered repayment defaults to those who had previously been its lifeblood. Of course, as this occurs within the context of a devalued dollar, rising costs of living and fueling, it becomes increasingly a challenge for average Americans with responsible financial history to persist. With repayment, borrowing and lending down and collection efforts and defaulting up, investment by lending institutions or private citizens in the types of opportunities that produce economic growth are increasingly rarified. This is sheer evidence of our mounting depression."

Sample of Sources Used:

• Associated Press (AP). (2007). Mortgage rates fall to low for year. Fox News. Online at http://www.foxnews.com/story/0,2933,257879,00.html
• Brinsley, John. (2008). Volcker says Fed's Bear loan stretches legal power. Bloomberg. Online at http://www.bloomberg.com/apps/news?pid=20601087&sid=aPDZWKWhz21c&refer=home
• CNN Money. (2004). 30-year mortgage rate dips below 6%. CNN . http://money.cnn.com/2004/08/05/real_estate/q_weekly_rates/index.htm
• Downey, K. (2006). Mortgage rates expected to continue their climb. Washington Post. Online at http://www.washingtonpost.com/wp-dyn/content/article/2006/03/24/AR2006032400944_pf.html>.
• Haddad, A. (2006). California and the West; Home sales continue to decline. Los Angeles Times.

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