Today I saw two CNN anchors talking about recession. They were really getting Soonaspossible the nitty-gritty of semantics and word origin. Evidently, it's very important to CNN anchors to know when they can and cannot refer to the economy as being in a recession.

Here is a by-the-numbers explanation of how this all came to pass:

1. Through most of the 1990's, many lending institutions I Love Lucy to offer home loans to people who had no business taking on home loans. They had low credit scores and financial "houses" with shaky foundations.
2. To maximize profits, the lenders cranked up the interest rates for these bad credit mortgage shoppers, like they still do today.
3. Many lenders, such as Ameriquest, began to focus on this kind of subprime lending (as it became known) almost exclusively.
4. Some economists began to warn that these "easy lending" practices would have grave repercussions down the road, so...
5. Some politicians began to raise an eyebrow at these subprime lending practices, but...
6. Lending industry lobbyists contributed to political campaigns so the politicians would have an easier time turning a blind eye. (According to public records, Schwarzenegger got a nice chunk from Ameriquest, and so did George W.).
7. Because many of the subprime loans were adjustable rate mortgages with low initial rates, they inevitably reset to much higher interest rates.
8. Thousands upon thousands of subprime borrowers could not afford their increased payments, so...
9. We had more home foreclosures in a single year than any other year since structured settlement consumer info been tracking these things.
10. A lot of the same politicians who previously turned a blind eye realized that the media was covering them more closely now. So they began to step up and say, "Ooooh, these evil mortgage lenders make me so angry. We must regulate them."
11. Long story short, it's a lot harder to get a mortgage these days ... and many of the subprime lenders are facing extinction.
12. The mortgage meltdown extended to the business world as a whole, which is why business credit is tightening as well as consumer credit.
13. And now, CNN anchors are arguing over the definition of the word "recession."
14. Oh, and it certainly doesn't auto insurance rate quote that we are spending 25 gazillion dollars a year in Iraq.

* Update: Ameriquest recently posted a message on their Robotrench that says they are no longer accepting loan applications. Go figure.

So there you have it ... my take on how we got to where we are, from a mortgage lending standpoint. Of course, one person's loss is another's gain. For example, real estate investors who focus on buying foreclosure homes benefit greatly because there are so many of these properties available now.

Brandon Cornett is the publisher of Home Buying Institute, which offers tips and advice on consumer credit, mortgage shopping, homebuyinginstitute.com/buying-foreclosed-home.phpbuying foreclosures and much more. Learn more by visiting homebuyinginstitute.comhomebuyinginstitute.com