Home ownership is a part of the American dream. About eleven years ago, a black cloud came over the housing market. Because of changes in the real estate laws and the illegal practices of mortgage lenders, the dream of owning a house has become a nightmare.

People use to look forward to owning a home. Now the foreclosure rate is higher than it has ever been which has brought down the value of homes in the same vicinity. Not only did this make people underwater in their houses, but it also causes them to have negative equity. The only alternatives that were available to them were either short selling or foreclosure. This can be a very disappointing experience for both a new homeowner as well as someone that has been in their home for ten years or more. This was really a slap in the face to many homeowners. One group of people that contributed to this nightmare was faulty appraisers. Many of them were in chouse with mortgage lenders; they would exaggerate the value of houses in order to secure the loan. Some states have been affected more than others have. According to Realty Trac the top five states that have been hit the hardest are: Nevada, Arizona, California, Florida, and Idaho.

From an economic perspective, many believe that the housing foreclosure woes came because of sub prime mortgage lenders. Many skeptics also believe that these types of lenders issued mortgage loans to people who under normal circumstances would have not been able to obtain them. This statement is unfair because everybody deserves a chance to become a homeowner. Some people were so excited about becoming homeowners that disregarded many of the contractual obligations of their mortgage loans. Adjustable rate mortgages commonly known as ARM’s; these rates normally are fixed for the first two years. After those two years are up the interest rate can adjust every six months reaching as high as thirteen percent. On many occasions, this eventually leads up to a foreclosure on the property. Those odds are surely not in favor of homeowners. Another factor that has contributed to destroying the American dream of homeownership was a change in one particular real estate law. Many people were told by lenders when purchasing their homes not to worry if the interest rate was too high because they could refinance within two years of the purchase. The change in the law made it where homeowners could no longer refinance with the mortgage company that they initially got the loan.

Many changes in the housing industry have turned the American dream of home ownership into a nightmare. This country has become plagued with an extremely high foreclosure rate. Hopefully the housing market will rebound from these turbulent times which may restore the American dream of home ownership.