How Property Crowdfunding Can Prevent the Next GFC?
To make the claim that Crowdfunding could actually help prevent any future GFC one must first know what exactly transpired during the last GFC. The basic elements of every financial issue are the moment you break it down to the core and easy. People purchase things that they can't afford to purchase.
For a while, it seems like the "make-believe" world continues to function. Then, the music stops and everything comes crashing down. Motivated by low-interest rates and loose financial regulations, lending institutions in the US began encouraging consumers to take out loans and purchase a house. You can also know more about property crowdfunding online via https://crowdfunding-platforms.com/real-estate-crowdfunding.
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What is more secure than investing your money into a home? It is after all the ultimate American goal to own a house. Prices for homes have historically not fallen. The population continues to grow while the land is at the same level, the price of a house will never increase this was a general idea. It seemed to hold up.
The amount of money available to lend for a secure property like a home is unending as was the federal government on it. To help encourage the dream of homeownership and to promote the dream of homeownership, government officials US federal government basically backed home loan applications from those who were unworthy to would not approve a huge home loan.
When the full power and power of the state was behind these loans they were referred to as "subprime" mortgages offered very lucrative. They provided high rates of interest as well as were secured by a safe asset as well as a guarantee from the government.