Financial markets worldwide tumbled swiftly and suddenly in the Fall of 2008. It’s hard for some people to say they didn’t see it coming, because they did. They just didn’t know quite how bad it would be, nor precisely when the stock market might actually crash. What they did know was that which was obvious to anyone who was paying attention to the details. Lending standards had dropped to near, or even entirely, historic lows. Merely walking through the doors of any bank seemed to be a strong enough quality for which to receive a loan. Not a few thousand dollars for a car to get to a job, either. Massive loans, for houses large and small, were handed out thoughtlessly. The loans themselves were made ever bigger by not only the increasing price of houses, but also by the ever dwindling size of the amount required for down payment.
Long before the concept of down payment evaporated entirely, it was obvious standards had declined. Mortgages, once requiring a minimum of 20 percent down for a buyer with a stable job, strong credit score, and lengthy work history, were suddenly going to people who struggled to make a car payment. The disparity between old reality and new reality was stark. Anyone who didn’t own their own home looked like a sucker, left behind by the savvy masses.
And yet some refused to play the game. Taking on not even a tiny amount of debt, these people soon looked like the smart players amongst the former big shots, who in many cases, no longer even qualified for micro lending. As banks shut their doors to new loans of any size, other doors were being shut in states across the country. The front doors to houses, as those who found themselves in wildly over their heads, closed gently behind these departing tenants. No return was in sight.