In 2004 it was easy to make money on real estate. Buy a rundown house, fix it up, and rent it. Or better still, make improvements to a rundown house and flip it — selling it for a quick profit to potential landlords. That bubble burst in 2008. Rapidly depreciating property values left landlords and homeowners with mortgages worth much more than the actual value of their property and with interest rates on adjustable-rate mortgages boosting payments beyond what they could afford. Foreclosed properties flooded the market and created a credit crunch. The housing crisis revealed unscrupulous practices in the mortgage lending, appraisal, and real estate industries. In this chapter you'll learn how the tight credit market affects you and how you can protect yourself when you take out a loan.