The Dream

Once upon a time, we were young, and our parents were in control of our lives. They told us what to do, and how to do it. We thought a lot about what our lives would be like once we grew up, and looked forward to the day when we would become masters of our own destinies; allowing us to make the important decisions that would shape our lives.

Collectively, we dreamt about becoming doctors, lawyers, secret agents, superheroes, football, baseball, and basketball stars.

Girls dreamt about the perfect guy, her prince charming, the beautiful engagement ring he would give her, and the fairytale wedding that would follow. She would be the envy of all of her girl friends.

Boys dreamt about growing up and making a lot of money; enabling them to buy expensive cars, travel to exotic places, and own fabulous homes. They also thought of meeting their dream girl. One so beautiful that nothing would need to be added or taken away from her. She wouldn’t need to be altered in any way. She is perfect.

The years came and went; we found ourselves adults. We got jobs, married, and bought homes… We were living the American Dream.

One day, we noticed all of the new subdivisions being built around the country; large beautiful homes that we simply could not afford. But our friendly financial institution saw an opportunity to make ungodly amounts of money. With interest rates being amongst the lowest in history, the banks and mortgage companies devised ways to make sure anyone could buy a home.

They used the following products:

1. Adjustable rate mortgages (ARM) are loans in which the interest rate on the note is periodically adjusted via a variety of indexes.
   
2. Interest-only mortgages are loans in which for a set term the borrower pays only the interest on the principal balance, yet the principal balance remains unchanged.
   
3. Sub-prime mortgages, which use the borrower’s Fico score and loan to value ratio (LTV) to determine the type of loan that a borrower would qualify for.
   
4. Liar loans, when all else failed, the banks would simply accept undocumented earnings to allow you to qualify for the mortgage.

We soon found that we could buy more home than we could have otherwise afforded.  Yes, we were truly living the dream.

The dream became a nightmare…  

With all this money available housing prices began to reach unsustainable levels, interest rates began to rise, loans began to reset, people began to default by the thousands.

But not to worry, we will dream again.  However, this time we will be smarter.

The benefits of this nightmare

Remember, any time there is adversity, there is also opportunity.  Have you thought about contacting lenders about cleaning up their foreclosed properties; perhaps keeping the grass cut and the property free of litter. The more affluent the area is, the more important this point is, and the more potential money one could make providing this service.  Sometimes these homes may need painting.  How about offering to keep a daily or weekly watch on these homes to make sure vandals do not strip them.

As more and more people fall victim to foreclosure, they begin to strip their own homes before deeding them to the bank; selling light fixtures, ceiling fans, hot water heaters, and even the A/C unit!  If you're skilled in this area, you could offer to reinstall these things.

If you sit down and really think, I'm sure you will come up with many more ways to profit from the housing crisis.