Upcoming Foreclosures

Why is the large number of foreclosures labeled a "crisis"?

I don't understand why people are calling this a crisis. All I see is a price correction of a huge assest bubble hyperinflated by irresponsible lending and borrowing. Foreclosure are necessary to lower prices to normal. Are the politicians labeling this a crisis just to get cheap votes?

Public Comments

1. The label "crisis" has come along because along with all of the foreclosures, banks are losing a significant amount of money. I agree that alot of banks were hasty and irresponsible in lending. But the second part of this is that according to economists nationwide and Ben Bernanke (chairman of the Federal Reserve), we as a nation are on the cusp of a recession.
2. It's partly politics, partly reality. When irresponsible lending from banks, and high home prices combine to make a real estate bubble, a correction was inevitable. Now it wouldn't be as bad if people were still paying their mortgages because when a bank forecloses on a property, they usually sell it for much less than it's worth. Herein lies the problem: When banks are selling homes, other house prices in the neighborhood go down quickly.