Timeline of The United States Housing Bubble - 2008

2008

Home sales continue to fall. Fears of a U.S. recession. Global stock market corrections and volatility.

• January 2–21: January 2008 stock market downturn.
• January 24: The National Association of Realtors (NAR) announced that 2007 had the largest drop in existing home sales in 25 years, and "the first price decline in many, many years and possibly going back to the Great Depression."
• March 10: Dow Jones Industrial Average at the lowest level since October 2006, falling more than 20% from its peak just five months prior.
• March 14–18: Dropping valuations of mortgage securities caused by skyrocketing default and foreclosure rates forces margin calls to the Wall Street bank Bear Stearns for debts the bank used to leverage mortgage issuances, and threatens BSC with bankruptcy and causes worldwide market jitters. In a weekend deal brokered by U.S. Treasury secretary Paulson and Fed chairman Ben Bernanke, JPMorgan bank agrees to purchase BSC for $2 per share, compared to their 2007 high of nearly $170, in exchange for the Federal Reserve Bank agreeing to accept BSC's devalued mortgage backed securities as collateral for public loans at the newly created Term Securities Lending Facility (TSLF), effectively providing a mechanism to bail out Wall Street banks threatened with insolvency.
• March 1–June 18: 406 people were arrested for mortgage fraud in an FBI sting across the U.S., including buyers, sellers and others across the wide-ranging mortgage industry.
• June 18: As the chairman of the Senate Banking Committee Connecticut's Christopher Dodd proposed a housing bailout to the Senate floor that would assist troubled subprime mortgage lenders such as Countrywide Bank, Dodd admitted that he received special treatment, perks, and campaign donations from Countrywide, who regarded Dodd as a "special" customer and a "Friend of Angelo." Dodd received a $75,000 reduction in mortgage payments from Countrywide. The Chairman of the Senate Finance Committee Kent Conrad and the head of Fannie Mae Jim Johnson also received mortgages on favorable terms due to their association with Countrywide CEO Angelo R. Mozilo.
• June 19: Ex-Bear Stearns fund managers were arrested by the FBI for their allegedly fraudulent role in the subprime mortgage collapse. The managers purportedly misrepresented the fiscal health of their funds to investors publicly while privately withdrawing their own money.
• July 30: Housing and Economic Recovery Act of 2008 changes the $250,000/$500,000 capital gains exclusion applying to second homes and rental property.
• Year-end: A total of 3,157,806 foreclosures were filed on 2,330,483 properties during the year, up 81 percent from 2007. More than 1.84 percent of all households were in some stage of foreclosure during 2008, up from 1.03 percent in 2007.