What is the top real estate story of 2008? Fannie Mae? Lehman Brothers? Washington Mutual? A year ago, we discussed how the excessive extension of credit that led to defaults, foreclosures, home prices and more expensive mortgage money was the most talked-about story of 2007. Everyone in the home buying and refinancing process was complicit, including brokers, bankers, securitizers on Wall Street, wide-eyed consumers and real estate agents. Clearly, lenders made loans far too available, bowing to the pressure of Wall Street funds willing to securitize any instrument secured by a home. Yet home buyers and investors did not use caution. While genuine buyers determine what they can afford by measuring their borrowing costs against their income, many others were blinded by the dolla...
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