Housing Crisis

Most of the problems come from the current accepted way people expect to live - which is a product of the 60s - when people suddenly decided that it was trendy to 'move out' from their parents and have a flat when jobs were easy to come by (booming economy), the tv and film images of the time promoted that lifestyle and the cost of living was relatively low.

This was also assisted by the growth of local authority old people's homes meaning the oldies were booted out so the empty-nesters could move to the country. 

This Western trend means families who used to live in multi-generational housing were suddenly split up with no supporting each other.   This continued through the 70s and by the 80s, it was the norm - everyone separated with no family support and an expectation / entitlement of a lifestyle that they couldn't afford.

A growing population meant there wasn't enough cash to pay for all these freebies so now people are falling through the cracks.     

All landlords take on the huge liability of property ownership and the responsibility to deal with dead-beat tenants and vandalism all at their own expense.       I don't know anyone making money from renting property any more - the quality of the tenants has gone down so it's usually costing them money to eventually get them evicted and have to fix up the property ready for the next lying deadbeat to rip them off again.       The only money they ever make is when they sell the property - and then they get screwed for capital gains tax on top.

If you look at the way Asian people tend to live, it's very much more centred around the family - we could learn a lot from simplifying  our expenditure by living in larger groups rather than this individual, expensive lifestyle and reconnect with family..

Having read some of your other posts, I'm very surprised at this. Is it not a bit one-sided or perhaps only from your own experience of being a landlord ? Forgive me if I'm wrong, it's nothing personal.

Plastic said:

Most of the problems come from the current accepted way people expect to live - which is a product of the 60s - when people suddenly decided that it was trendy to 'move out' from their parents and have a flat when jobs were easy to come by (booming economy), the tv and film images of the time promoted that lifestyle and the cost of living was relatively low.

I think people will always seek a better standard of life and can only work with the opportunities available to them at the time. Trends may play a part but it is often Government policy and the influence of the rich & powerful that often dominate or drive the economy. We have to remember that before the war a lot of poor people were living in disease ridden cesspit's with no welfare or healthcare. Fortunately, many who survived the war sought to change this, after all, what would be the point of fighting for a country that didn't give a toss about you at home ? So thanks to these people we got Universal Healthcare and the beginning of a welfare system to address this abject poverty and along with other measures, like a progressive tax policy, the 50's & 60's were the golden age for economic equality. People had great hope in the future. You can hear this in music of the time. Social Housing rent at the time didn't exceed 10-20% of your income. If you contrast that with the present, for example, a person on full-time min-wage, Social Housing rent will be around 60-80% of income. Even if you earn double that of min-wage today, you can expect to pay roughly the same percentage privately like-for-like. I don't think it's because what people have come to expect per-say but a product of a semi-rural society shifting into an industrialised one where people had to move where the work was and that was in big towns & cities where the factories were located.

Plastic said:

This Western trend means families who used to live in multi-generational housing were suddenly split up with no supporting each other.   This continued through the 70s and by the 80s, it was the norm - everyone separated with no family support and an expectation / entitlement of a lifestyle that they couldn't afford.

It goes back to the huge shift that came with the Industrial Revolution, the biggest, most rapid shift in human history and the massive growth in towns & cities. If anything is to be blamed on the break-up of the Family and Community we have to look here as we have never lived this way in the past. Also worth noting from the 70's onwards, there has been a reversal of progressive tax policy in the Western world, huge financial de-regulation, explosion in tax-havens and an economy heavily reliant on the boom & bust housing market - Real Estate sector which led us to the biggest recession in 2008 since The Great Depression. The de-industrialisation and loss of decent-paid jobs for non-professionals or the working classes were never replaced so the working class became the under-class and the middle-class the new working class as economic equality has deteriorated so much from the 50's/60's and to some extent the 70's. The ratio of income vs the cost of living has never been worse.

I am just about old enough to remember the images shown in our media of people in the former Soviet Union queuing for hours on end in the hope they may be lucky enough to get a loaf of bread. We were being shown this to highlight their system was broken and didn't work. It just makes me wonder are some of those people there now being shown the thousands of Food-Banks we have here in their media. And most of the users are in some kind of work. 

Plastic said:

All landlords take on the huge liability of property ownership and the responsibility to deal with dead-beat tenants and vandalism all at their own expense.       I don't know anyone making money from renting property any more - the quality of the tenants has gone down so it's usually costing them money to eventually get them evicted and have to fix up the property ready for the next lying deadbeat to rip them off again.       The only money they ever make is when they sell the property - and then they get screwed for capital gains tax on top.

Lol .There are plenty of ' deadbeat ' landlords so surely it can't all be one-sided ? 

Hi - I'm not a landlord or rich - I have a mortgage.   

From what I read, you are looking only from the bottom up with no hard business understanding.- you talk of fighting for welfare but in reality, the the public were lied to to get them to vote Labour - they have always known that all the promises were not supported financially so it was doomed to collapse when the amount of people taking out outweigh the money being paid in.       

The people of the 50s, 60s and 70s acted like spoilt children - expecting everything to be handed to them with no responsibility - and they all got it all until the 80s when the money started running out.     Naturally, the Labour governments kept lying to the voters while the Tories enabled a system where you could invest in your own future rather than rely on a non-existent 'future pensions' that could not be funded.     They, unfortunately, didn't tell the public how screwed the system really was.    All of the people blaming Maggie for selling the Silver didn't understand that the welfare state was bleeding the country dry so money was needed to prop it up.     They kept 'wanting' but refused to think about the ludicrous amount of money they were sucking from the system.

By the 2000s, the term 'austerity' was being thrown around to prepare the people for the system's collapse.         Most people being born today will be back to how their great, great-grandparents were 100 years ago - no pensions, no healthcare and no future.

You can pretty much equate the welfare state with the US cities like LA and Chicago - massively unionised and totally bankrupt because of crazy financial policies.

The entitlement for unearned status is rife today - so many people expecting everything for nothing and refusing to take any responsibility for their own destiny.

Deadbeat tenants carry zero risk - the law is heavily on their side - a deadbeat landlord can be hauled through the courts and bankrupted very easily.       If you want to pay well below market rate for your accommodation, then common sense says the landlord won't be spending anything on the property upkeep - your choice.

There's always the option of moving somewhere cheaper in the country that you can afford - but people demand local convenience along with their demand for someone else paying for their life.

BTW - the 2008 collapse was brought about by a forced US policy of making lenders loan money to people who absolutely could not afford to pay the loan (to 'buy' minority votes)..    Suicidal.!     (I could go into depth but it's takes more than I want to type.)

BYW - I have no political allegiance - they are all lying scumbags.

Plastic said:

The only concern I have at the moment is I can't work out if we're right in the middle of an engineered financial crash - and the scamdemic is the boogeyman - or if this is actually WW3 and we are on the losing side.

Okey Dokey.  

Yes - I agree with all you say - but it was the first real housing big crash in the US.    Traditionally, houses there are just cheap shelters in most States because nature will take it away every few years - hurricanes, tornados, flooding, fires and termites do a thorough job.    For some reason, they decided to mirror the UK housing boom of the 80s which lead to grossly overpriced property and that why the crash was so big in the US.      I remember visiting Florida in 2009 and seeing all the huge housing estates in darkness - everyone had moved out!

The problem is banks don't want to confiscate property - especially in a collapsing market - they can't ever recover their investment.      They would much rather let you remortgage over and over to avoid it.    

There's an old saying - when you owe the bank £10k you have a problem - but if you owe them £10M, *they* have a problem.

The only concern I have at the moment is I can't work out if we're right in the middle of an engineered financial crash - and the scamdemic is the boogeyman - or if this is actually WW3 and we are on the losing side.

I'm not disagreeing with you on how it happened. My point is why it happened and that was down to the massive de-regulation of the 80's under Thatcher/Reagan that more or less continued to the 2008 crash.

What you describe as happening in the US market was no different in the UK at the time or Spain or Ireland or in any other country that relies heavily on a boom and bust housing market. In the UK there were mortgage shops/financial advisors/estate agents - middle men, popping up in every High Street across the country on a regular basis. It was inevitable as will the next one be. It's basically an unregulated, crash & burn ponzi scheme, where Mr bank, who doesn't bring anything to the table in a mortgage, apart from a piece of paper, has no money to back up the loans then proceeds to hand out millions of mortgages/loans and collects all the interest from those who can afford to make the payments for 25 years. Then when the inevitable crash happens, confiscates all the property from those who can't make the payments and sells it, puts all those profits in a nice Caribbean Island and asks the Gov for a bailout, paid by the tax-payer. I've simplified it but that is Laissez-faire, un-regulated Capitalism - every man for himself. Those are the rules during the boom. When the bust happens, the rules are a wee bit different. It's every man for himself for the public - house re-possessions, bankruptcy, unemployment, austerity. For the banks its Socialism and bailouts. Of course no country totally escaped the aftermath of the 2008 recession but the ones who avoided the worst where those who do not rely heavily on a boom and bust housing market, had more financial regulation protection, had a more balanced economy with manufacturing, a more regulated housing market, no student debt and generally better social/welfare systems in place.

Those companies who avoided the worst were those who were run more democratically where everyone had a say into how the company was run, managers chosen, wages paid etc. Many of these companies avoided redundancies completely while those companies with a director/s on huge salaries and a top down approach, undemocratic, share-holder-driven either had to make massive redundancies or went into administration or bankruptcy .  

When everything is privatised for profit to the extreme ( UK/US ) the market dictates what happens. That's why they don't care about a housing crisis for people with poor incomes or building long-term, sustainable, low-cost, social housing. Unless there is a gravy train, the next big ponzi scheme or huge profits to be made it aint gonna happen. It won't happen with a Conservative party that is for sure.

I find it quite ironic that we clap NHS workers yet many of them are using food banks, having wages frozen and struggling to find any sustainable, affordable housing. 

I could go into great detail about all my points - they may sound contradictory in small chunks but it's hard work typing it all out on here.

It's more of a face-to face down the pub discussion.

The 2008 thing - I was in the US a lot 20 years ago and was watching the housing market (we were looking at moving over there) It was scary - https://en.wikipedia.org/wiki/Government_policies_and_the_subprime_mortgage_crisis 

It was like the mid 80s in the UK - middle men filling in forms overstating income for Pedro the lawnmower so he an get a low-start mortgage on the deposit for a new build plot  with the understanding he could sell the house just before it was finished in a few years and make a huge profit from the rise in value in the intervening years.

The middle classes took advantage of this too as a pension pot - working like dogs to pay the 3 or 4 of these low-start deals and getting into debt so they could make a killing in a few years time when they sell the new houses.

The banks did very well bundling up these good debts and selling them on to the bigger banks.

By 2007, Pedro and everyone else suddenly put all their options on the market at the same time and flooded the market - there were no buyers, only sellers.

Suddenly, the low-start periods all ended and their monthly payments quadrupled-  which they couldn't afford so they defaulted and lost everything to the bank.

The bank suddenly had no cash flow - and the trust up the line was broken when all if the debts that had been bought up suddenly went sour.    All the banks just froze - and there was no cash movement so it all fell flat on its face.      (this is a very simplified version but is totally accurate,.)

Plastic said:

From what I read, you are looking only from the bottom up with no hard business understanding.-

Hi, Not really. I always look at the underdog first and if I see pain or suffering I want to understand what is the cause of it. If there is a ' hard business ' understanding or model or whatever, what is it and was it handed down, carved in stone from above ? Is this a religion you are referring to or simply a system you were born into and have gotten to know how it works from a particular point of view ? How old is the current system ?

Plastic said:

you talk of fighting for welfare but in reality, the the public were lied to to get them to vote Labour - they have always known that all the promises were not supported financially so it was doomed to collapse when the amount of people taking out outweigh the money being paid in.      

Well, what you are really talking about is shifting the goal posts. First, we were told that we lived in a meritocracy and that if you simply worked hard or put in the effort you would keep rising through the ranks in a perpetual progression. The sky was the limit as long as you were a good little boy/girl. What a crock of bu!!sh!t that turned out to be. Of course I agree the Labour movement were slow to grasp this but at the time they were only being practical in what was the reality of the time. And that was protecting themselves in the post-war industrialsed world of large manufacturing & Labour and the public sector. Meanwhile, the West was busy telling the rest of the world to become like them but the problem with that was that they did just that. That was when all the Industrialised and decent paid jobs for the semi-skilled, working class etc left because the rich and powerful got their manufacturing from overseas because it was cheaper and more profitable, not because it protected jobs and livelihoods at home - the opposite. The system was in no way doomed to collapse under the post-war world we found ourselves in. It was the reality of the time. Of course, if you want to compete with countries like China with this child-like mentality then I guess if you are really serious about this rigid mindset you will have all the answers to this madness ?  

Plastic said:

he people of the 50s, 60s and 70s acted like spoilt children - expecting everything to be handed to them with no responsibility - and they all got it all until the 80s when the money started running out.     Naturally, the Labour governments kept lying to the voters while the Tories enabled a system where you could invest in your own future rather than rely on a non-existent 'future pensions' that could not be funded.     They, unfortunately, didn't tell the public how screwed the system really was.    All of the people blaming Maggie for selling the Silver didn't understand that the welfare state was bleeding the country dry so money was needed to prop it up.     They kept 'wanting' but refused to think about the ludicrous amount of money they were sucking from the system.

Also, coincidentally when they decided that we could no longer make anything worth selling to the the rest of the world. Or was it that they found other cheaper markets abroad that would maximize their profits ? Was that in countries that before that, we were told were absolute demons ? It's funny that countries like Germany and others, still have a reputation of manufacturing goods and still have a high standard of living ? Also, that Germany and all of the Nordic countries that don't subscribe to the UK/US model have a much higher standard of living to boot ?

Plastic said:

By the 2000s, the term 'austerity' was being thrown around to prepare the people for the system's collapse.  

Couldn't be a very good system in place then ? Did Austerity solve anything or make the situation better ?

Plastic said:

Most people being born today will be back to how their great, great-grandparents were 100 years ago - no pensions, no healthcare and no future.

Who do you blame for this ? Where do you get your information from, honestly.

Plastic said:

ou can pretty much equate the welfare state with the US cities like LA and Chicago - massively unionised and totally bankrupt because of crazy financial policies.

I don't think many economists would agree. But lets take the US as a whole. It is a country afterall isn't it ? 

Arguably, the US is the most capitalistic country in the world. I mean, if you sneeze you may be liable to a court case or go bankrupt if you happen to be sick ?

How many hours do Americans work compared to the rest of the world ?

How much do they pay in private health care provisions for the worst outcomes in the industrialsed world  ?

Do they have Universal health care = no.

What percentage of their population is in prison compared to the rest of the worlds ?

Do they have Labour  rights= questionanable .

How much is spent from the tax payers budget on public services ?|

How much studies have shown that it is those with the most money who get elected every time ?

Do they have legal representation regardless of income or is the law only for those who have deep pockets  ? 

Plastic said:

The entitlement for unearned status is rife today - so many people expecting everything for nothing and refusing to take any responsibility for their own destiny.

Could you expand please ?

Plastic said:

Deadbeat tenants carry zero risk - the law is heavily on their side - a deadbeat landlord can be hauled through the courts and bankrupted very easily.       If you want to pay well below market rate for your accommodation, then common sense says the landlord won't be spending anything on the property upkeep - your choice.

A cold, callous and deadly view of the world.  If you are really serious about talking equality then most landlords would probably be in prison if you are totally honest ?

Tell me this ? How many tenants get gov funding or tax breaks ? How many companies, corporations etc get this and then go into the market to sell their products ? If you are talking about risk, then I would be more than happy to talk about the deficit between ordinary people and companies or corporations in securing gov funding so there is no financial risk ?

Plastic said:

There's always the option of moving somewhere cheaper in the country that you can afford - but people demand local convenience along with their demand for someone else paying for their life.

Hang on a moment. First you're portraying yourself as a unifying force of family and community, then the next, you are saying : get on your bike to look for or take work wherever it may be ? Exactly where do you stand on protecting this 20 to a household, kind of thing you are trying to paint as the ideal ? 

Plastic said:

BTW - the 2008 collapse was brought about by a forced US policy of making lenders loan money to people who absolutely could not afford to pay the loan (to 'buy' minority votes)..    Suicidal.!     (I could go into depth but it's takes more than I want to type.)

Really ? I'd be interested to pursue this . 

Plastic said:

From what I read, you are looking only from the bottom up with no hard business understanding.-

Hi, Not really. I always look at the underdog first and if I see pain or suffering I want to understand what is the cause of it. If there is a ' hard business ' understanding or model or whatever, what is it and was it handed down, carved in stone from above ? Is this a religion you are referring to or simply a system you were born into and have gotten to know how it works from a particular point of view ? How old is the current system ?

Plastic said:

you talk of fighting for welfare but in reality, the the public were lied to to get them to vote Labour - they have always known that all the promises were not supported financially so it was doomed to collapse when the amount of people taking out outweigh the money being paid in.      

Well, what you are really talking about is shifting the goal posts. First, we were told that we lived in a meritocracy and that if you simply worked hard or put in the effort you would keep rising through the ranks in a perpetual progression. The sky was the limit as long as you were a good little boy/girl. What a crock of bu!!sh!t that turned out to be. Of course I agree the Labour movement were slow to grasp this but at the time they were only being practical in what was the reality of the time. And that was protecting themselves in the post-war industrialsed world of large manufacturing & Labour and the public sector. Meanwhile, the West was busy telling the rest of the world to become like them but the problem with that was that they did just that. That was when all the Industrialised and decent paid jobs for the semi-skilled, working class etc left because the rich and powerful got their manufacturing from overseas because it was cheaper and more profitable, not because it protected jobs and livelihoods at home - the opposite. The system was in no way doomed to collapse under the post-war world we found ourselves in. It was the reality of the time. Of course, if you want to compete with countries like China with this child-like mentality then I guess if you are really serious about this rigid mindset you will have all the answers to this madness ?  

Plastic said:

he people of the 50s, 60s and 70s acted like spoilt children - expecting everything to be handed to them with no responsibility - and they all got it all until the 80s when the money started running out.     Naturally, the Labour governments kept lying to the voters while the Tories enabled a system where you could invest in your own future rather than rely on a non-existent 'future pensions' that could not be funded.     They, unfortunately, didn't tell the public how screwed the system really was.    All of the people blaming Maggie for selling the Silver didn't understand that the welfare state was bleeding the country dry so money was needed to prop it up.     They kept 'wanting' but refused to think about the ludicrous amount of money they were sucking from the system.

Also, coincidentally when they decided that we could no longer make anything worth selling to the the rest of the world. Or was it that they found other cheaper markets abroad that would maximize their profits ? Was that in countries that before that, we were told were absolute demons ? It's funny that countries like Germany and others, still have a reputation of manufacturing goods and still have a high standard of living ? Also, that Germany and all of the Nordic countries that don't subscribe to the UK/US model have a much higher standard of living to boot ?

Plastic said:

By the 2000s, the term 'austerity' was being thrown around to prepare the people for the system's collapse.  

Couldn't be a very good system in place then ? Did Austerity solve anything or make the situation better ?

Plastic said:

Most people being born today will be back to how their great, great-grandparents were 100 years ago - no pensions, no healthcare and no future.

Who do you blame for this ? Where do you get your information from, honestly.

Plastic said:

ou can pretty much equate the welfare state with the US cities like LA and Chicago - massively unionised and totally bankrupt because of crazy financial policies.

I don't think many economists would agree. But lets take the US as a whole. It is a country afterall isn't it ? 

Arguably, the US is the most capitalistic country in the world. I mean, if you sneeze you may be liable to a court case or go bankrupt if you happen to be sick ?

How many hours do Americans work compared to the rest of the world ?

How much do they pay in private health care provisions for the worst outcomes in the industrialsed world  ?

Do they have Universal health care = no.

What percentage of their population is in prison compared to the rest of the worlds ?

Do they have Labour  rights= questionanable .

How much is spent from the tax payers budget on public services ?|

How much studies have shown that it is those with the most money who get elected every time ?

Do they have legal representation regardless of income or is the law only for those who have deep pockets  ? 

Plastic said:

The entitlement for unearned status is rife today - so many people expecting everything for nothing and refusing to take any responsibility for their own destiny.

Could you expand please ?

Plastic said:

Deadbeat tenants carry zero risk - the law is heavily on their side - a deadbeat landlord can be hauled through the courts and bankrupted very easily.       If you want to pay well below market rate for your accommodation, then common sense says the landlord won't be spending anything on the property upkeep - your choice.

A cold, callous and deadly view of the world.  If you are really serious about talking equality then most landlords would probably be in prison if you are totally honest ?

Tell me this ? How many tenants get gov funding or tax breaks ? How many companies, corporations etc get this and then go into the market to sell their products ? If you are talking about risk, then I would be more than happy to talk about the deficit between ordinary people and companies or corporations in securing gov funding so there is no financial risk ?

Plastic said:

There's always the option of moving somewhere cheaper in the country that you can afford - but people demand local convenience along with their demand for someone else paying for their life.

Hang on a moment. First you're portraying yourself as a unifying force of family and community, then the next, you are saying : get on your bike to look for or take work wherever it may be ? Exactly where do you stand on protecting this 20 to a household, kind of thing you are trying to paint as the ideal ? 

Plastic said:

BTW - the 2008 collapse was brought about by a forced US policy of making lenders loan money to people who absolutely could not afford to pay the loan (to 'buy' minority votes)..    Suicidal.!     (I could go into depth but it's takes more than I want to type.)

Really ? I'd be interested to pursue this . 

Plastic said:

The only concern I have at the moment is I can't work out if we're right in the middle of an engineered financial crash - and the scamdemic is the boogeyman - or if this is actually WW3 and we are on the losing side.

Okey Dokey.  

Yes - I agree with all you say - but it was the first real housing big crash in the US.    Traditionally, houses there are just cheap shelters in most States because nature will take it away every few years - hurricanes, tornados, flooding, fires and termites do a thorough job.    For some reason, they decided to mirror the UK housing boom of the 80s which lead to grossly overpriced property and that why the crash was so big in the US.      I remember visiting Florida in 2009 and seeing all the huge housing estates in darkness - everyone had moved out!

The problem is banks don't want to confiscate property - especially in a collapsing market - they can't ever recover their investment.      They would much rather let you remortgage over and over to avoid it.    

There's an old saying - when you owe the bank £10k you have a problem - but if you owe them £10M, *they* have a problem.

The only concern I have at the moment is I can't work out if we're right in the middle of an engineered financial crash - and the scamdemic is the boogeyman - or if this is actually WW3 and we are on the losing side.

I'm not disagreeing with you on how it happened. My point is why it happened and that was down to the massive de-regulation of the 80's under Thatcher/Reagan that more or less continued to the 2008 crash.

What you describe as happening in the US market was no different in the UK at the time or Spain or Ireland or in any other country that relies heavily on a boom and bust housing market. In the UK there were mortgage shops/financial advisors/estate agents - middle men, popping up in every High Street across the country on a regular basis. It was inevitable as will the next one be. It's basically an unregulated, crash & burn ponzi scheme, where Mr bank, who doesn't bring anything to the table in a mortgage, apart from a piece of paper, has no money to back up the loans then proceeds to hand out millions of mortgages/loans and collects all the interest from those who can afford to make the payments for 25 years. Then when the inevitable crash happens, confiscates all the property from those who can't make the payments and sells it, puts all those profits in a nice Caribbean Island and asks the Gov for a bailout, paid by the tax-payer. I've simplified it but that is Laissez-faire, un-regulated Capitalism - every man for himself. Those are the rules during the boom. When the bust happens, the rules are a wee bit different. It's every man for himself for the public - house re-possessions, bankruptcy, unemployment, austerity. For the banks its Socialism and bailouts. Of course no country totally escaped the aftermath of the 2008 recession but the ones who avoided the worst where those who do not rely heavily on a boom and bust housing market, had more financial regulation protection, had a more balanced economy with manufacturing, a more regulated housing market, no student debt and generally better social/welfare systems in place.

Those companies who avoided the worst were those who were run more democratically where everyone had a say into how the company was run, managers chosen, wages paid etc. Many of these companies avoided redundancies completely while those companies with a director/s on huge salaries and a top down approach, undemocratic, share-holder-driven either had to make massive redundancies or went into administration or bankruptcy .  

When everything is privatised for profit to the extreme ( UK/US ) the market dictates what happens. That's why they don't care about a housing crisis for people with poor incomes or building long-term, sustainable, low-cost, social housing. Unless there is a gravy train, the next big ponzi scheme or huge profits to be made it aint gonna happen. It won't happen with a Conservative party that is for sure.

I find it quite ironic that we clap NHS workers yet many of them are using food banks, having wages frozen and struggling to find any sustainable, affordable housing. 

I could go into great detail about all my points - they may sound contradictory in small chunks but it's hard work typing it all out on here.

It's more of a face-to face down the pub discussion.

The 2008 thing - I was in the US a lot 20 years ago and was watching the housing market (we were looking at moving over there) It was scary - https://en.wikipedia.org/wiki/Government_policies_and_the_subprime_mortgage_crisis 

It was like the mid 80s in the UK - middle men filling in forms overstating income for Pedro the lawnmower so he an get a low-start mortgage on the deposit for a new build plot  with the understanding he could sell the house just before it was finished in a few years and make a huge profit from the rise in value in the intervening years.

The middle classes took advantage of this too as a pension pot - working like dogs to pay the 3 or 4 of these low-start deals and getting into debt so they could make a killing in a few years time when they sell the new houses.

The banks did very well bundling up these good debts and selling them on to the bigger banks.

By 2007, Pedro and everyone else suddenly put all their options on the market at the same time and flooded the market - there were no buyers, only sellers.

Suddenly, the low-start periods all ended and their monthly payments quadrupled-  which they couldn't afford so they defaulted and lost everything to the bank.

The bank suddenly had no cash flow - and the trust up the line was broken when all if the debts that had been bought up suddenly went sour.    All the banks just froze - and there was no cash movement so it all fell flat on its face.      (this is a very simplified version but is totally accurate,.)