The Mortgage Crisis Is One Reason For Filing Bankruptcy

Bankruptcy cases filed in 2008 were nearing the 1 million mark. This clearly shows the financial stress being felt across the US and the dire need for relief and government intervention. Recent efforts by Democrats to pass a bill that would adjust existing mortgage loan amounts to more accurately reflect current fair market value were rejected by Republicans and the banking sector due to the projected losses banks would have to take, leaving homeowners still waiting for a resolution to their ever increasing mortgage rates.

The mortgage crisis is one of the major reasons for the current state of the economy and to some extension the number of people filing bankruptcy this year. Subprime loan products, being the most likely cause of the crisis, were marketed aggressively during the Real Estate boom of the first half of the decade, these loans, which started with low teaser rates, have adjusted to unmanageable levels for borrowers who could only qualify for such products during this time.