What happened to credit standards(down payment, mortgage loan relative to value, and creditworthiness of the buyer between 1995 and 2005? How did this influence the housing pricing bubble and later the default and foreclosure rates?

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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What happened to credit standards(down payment, mortgage loan relative to value, and creditworthiness of the buyer between 1995 and 2005? How did this influence the housing pricing bubble and later the default and foreclosure rates?

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From the year 1995 to 2005, there were many changes in the real estate market. This led to a change in credit standards. The minimum down payment mortgage loan relative to the house value was lowered tremendously. The rules of the creditworthiness of a borrower were also relaxed. All these were meant to induce more people to buy houses. The credit standards changed as the supply of houses was becoming less than the demand. This led to a hike in the prices of houses. 

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