For months now the subprime mortgage market has been filled with controversy due to the crisis that began in 2007 with the United States. The United States may have been the first country to fall into a mortgage crisis as a result of too much unstable lending, but even in the UK the banks are in a crisis. Not everyone is seeing the effects of the banking crisis though, even across the Atlantic. The mega rich are not suffering as much and therefore the whole crisis is favouring them more than normal working people.
Despite the fact that the free market arguments are prevalent in the economy, those in control are certainly not willing to bail out the banks in their time of need with their own capital, but with the taxes of working citizens. One could argue the banks were greedy and incompetent in their policies, but they are the backbone to lending and helping the normal population. Without banks to offer mortgages houses cannot be sold. For the regular person with great credit scores and a bit of savings this could mean it is impossible to get a loan. However, those with money are still getting loans, but this doesn’t help the general problem or the banking crisis.
Without stability in the banks the economy is not stable, and there is no money to pass around. In the US an agreement was reached for a bailout for banks. However, this bail out also included pork barrel spending, in that the Hollywood movie makers get 500 million USD to make movies on US soil. In the UK billions of pounds from taxes are also going to bailout the financial sector. But, while the bailout is needed, it still takes from normal citizens who work very hard just to survive. For those looking for a mortgage, times will remain tight for the next several months as products still remain off the market during the banking crisis.