Global credit crunch explained

August 12, 2:16 AMNorth Shore and Evanston ExaminerJason Hartong

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Jason Hartong

The Western World as a whole is experiencing the same lending problems as in the United States, due to the interdependence of banking on a global level. The United Kingdom has one of the highest homeownership percentages per population in the world. This has made the UK housing market vulnerable to foreclosures in far away places like Arizona. Many banks like Northern Rock of England, collapsed last Autumn due to being invested in US sub-prime notes.

Buyers applying for loans from most UK banks are experiencing the same challenges as here in the US, affected by stricter lending guidelines. Thankfully, interest rates have not gone up, cushioning the impact. When the current hangover in the housing market and lending industry come to an end, the present challenges will just be considered a blip on the radar.