Credit Crunch

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WHAT IS SO BAD ABOUT THE KREDIT KRUNCH?

Negative equity is a term used to refer to when the value of an asset used to secure a loan is less than the outstanding balance on the loan. In short, when someone buys a house on a loan and the house price falls drastically after the purchase, the buyer is left with a massive mortage he has to pay off, and a low house valuation by the bank. This often leads to bankruptcy and house repossession.