Courtesy of USA Today, below is a map of American mortgages originated during 2000. The darker the color of the county, the more common it was for consumers to be over-leveraged by receiving financing on a home who's price exceeds 4 times their annual income.
In the Year 2000:
Now let's take a look at the 2007. Prepare to get tangled up in blue:
Oversimplified Takeaway #1: Lenders were still making short-sighted and unsustainable loans as recently as 2007, when the ugly mechanics of the whole subprime debacle had already been well exposed.
Oversimplified Takeaway #2: For the most part, the Midwest wasn't taking part in the same level of risky activity as the coasts.
Oversimplified Takeaway #3: The one single area in the Midwest where these loans were heavily used was our very own Twin Cities, which certainly helps explain why 42 percent of our new listings in the fourth quarter of 2008 were lender-mediated foreclosures or short sales.
The question becomes: why Minnesota? Why weren't we as conservative as Wisconsin, The Dakotas, Iowa, Missouri, Nebraska, Texas and everyone else in our Central Time Zone was?
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