The collapse of the subprime mortgage market, which took place in 2006 had set in motion, kind of a chain reaction for financial and economic adversity, which has since then, spread to nearly all the sectors of the economy. This has created conditions which are depression-like in the housing market, leading the American economy to the brink of recession.

After two years characterized by declining activity in the housing market, many people were full of hopes that the market would revive soon, but this ha since seemed very unlikely. In 2008, home prices and sales were falling, with many borrowers losing their jobs. This tightened credit standards pushing many away from home ownership and the number of subprime mortgages resetting to higher payments.