The housing boom in America opened doors of opportunity to purchase homes that many could not afford, lasted many years and significantly increased the homeownership rate in the States.
Credits were extended past borrowers' means by lending institutions, and even borrowers who, under normal circumstances, did not qualify for loans, were being approved to purchase houses.
As a result, consumers developed a "spend more, save less" attitude.
When the housing prices began declining in mid-2006, Americans began to feel the effect of their "spend more, save less" attitude.
Many homeowners lost their homes, and the prices of homes for sale increased.
In today's market, many homeowners are still in danger of losing their homes, banks are facing significant losses, and the government is tightening its loan regulations.
A report by the Federal Reserve says most U.
S.
banks predict long-running tight lending.
Some banks have tightened their lending standards on prime home mortgages while others have tightened their standards on non-traditional mortgages, such as adjustable-rate loans with multiple payment options.
Others are tightening their standards for credit cards, making credit harder to acquire.
Most of the banks that were included in the survey expect that the tight lending standards for all types of loans will remain tight through the second half of 2010.
Unfortunately, for businesses and families with bad credit, the tight lending standards may continue into "the foreseeable future.
" This leaves consumers with limited choices in an unsure future of lending.
To revive the economy, the Obama administration has proposed new programs to help banks recover from losses and help homeowners avoid foreclosures.
Tax cuts and increased government spending are also expected to turn the economy around.
The benefits of the government programs are still to be seen.
Will they ever be seen?