How the Housing Crisis Cycle Unfolded in the Federal Reserve Fourth District: We didnt suffer from the crash of hyper-inflated housing prices, as people did in California, Florida, and other overheated housing markets. We suffered from over-lending.
In a vicious cycle, delinquencies led to defaults, which led to a high number of foreclosures, which led to an oversupply of housing, which led to home prices depreciating, which led mortgage lenders and servicers to suffer big losses that weakened their financial positions.
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