The Best Kept Secret in America

When the bundle of rights called Real Estate, expands, property becomes more valuable and correspondingly when the bundle shrinks property values decline. A shrinkage happened in 1987.

The United States Congress removed 30 provisions from the Federal Income Tax Law that relate to Real Estate. The bundle shrank.

Property values declined in America over the next 7 years . Generally speaking the poorest neighborhoods experienced the greatest decline.

Because property declined in value. Property owners walked away from their property. The property reverted to the lenders, i.e... the Saving and Loans, Banks, Insurance Companies and Pension Funds.

The lenders in turn collapsed and the property reverted to the United States Government, i.e. the Resolution Trust Corporation (RTC) where it was resold for $.45 on the dollar. By 1989 the RTC was the second largest corporation in America.

......and the great savings account of America, home equity, evaporated.