For as long as there have been rational lenders,
the rule has been that a person could afford a house
that costs roughly 3.5 times their income.
That means that a person making $60,000 a year can
afford a home worth $210,000.
A few years back, someone assumed that property
values were going up so fast, and would continue
going up so fast, that they essentially decided
to throw that age-old rule out the widow.
They found creative ways to prove to people that
they could afford homes that were normally WAY out
of their price range.
Soooo, not only could a person making $60,000 per
year easily qualify for a $400,000 loan… but a
person with NO job could also often qualify… and
at times even get money back on the closing 
At the same time that this was occurring, prices
where shooting up at an inflated rate largely
BECAUSE the easy financing was driving up demand.
Those loans were sold on secondary markets
incidentally, filling the system with essentially
worthless paper.
Investors became gamblers… and a percentage didn’t
know what a bad gamble it was. Some did know, and
didn’t care!
Fast forward a few years, and what we are really
seeing is the market moving back toward
equilibrium.
Over-valued homes in many areas are showing losses
of 30% – 40%… even more… compared to their
previous values.
While the downward trend has slowed, and even
stopped in some places, that HAS put a lot of
homes on the market at incredible prices.
Some of these VERY nice home can now be had at
much below their actual market values. In fact,
some can be had for 20 to 30 cents on the dollar…
when you know the secret that I share in this free
mini-course: http://timic.org/Rich/
NO, this is not financial advice.
Yes, I was formally trained in economics
Willie