These prices were effective both ways and even the evaluation of such houses was done on a grand scale. Even normal locations were projected as primetime. That led to many banks allowing good loans on the houses as the house price was great enough as a corollary.

When the bubble burst, reality sunk in. In a jolt, prices cane down disastrously. There was sudden seeming shortage of money and there were quite a few defaulters of loans.

Banks could not take a legal step against defaulters as they had the corollary in hand, only the prices of the houses were far under-written than the loans provided. Many banks collapsed and with them, the economy. Subprime crisis had started.