In retrospect, it seems terribly obvious that rampant subprime loans, easy credit and other financial evils that triggered the mortgage crisis and "Great Recession" weren't the best ideas. As a nation, we've certainly had to pay for our indiscretions and the aftereffects of the crisis will be with us well into the future. (From lenders to buyers to hedge funds, it appears everyone has blood on their hands. See Who Is To Blame For The Subprime Crisis?)

Here are five consequences we can expect to hear about for years to come.

IN PICTURES: 5 Steps To Attaining A Mortgage

1. The Rise of the "Slumburb"
The crisis spurred an avalanche of home foreclosures that left large sections of once prosperous suburban neighborhoods vacant and in disrepair. Poverty has also risen dramatically in the suburbs, which, according to the Brookings Institution in Washington, D.C, are now home to nearly a third of the nation's poor. This phenomenon is worst in and around Midwestern cities such as Grand Rapids, Michigan, and Youngstown, Ohio, but it exists nationwide. Poverty rates are actually rising more quickly in the suburbs than the cities.

2. The Ongoing Foreclosure Mess
The wave of foreclosures that accompanied the economic meltdown was just the start. People have been losing their homes ever since, and there's no end in sight. The Federal Reserve estimates there will be a total of 2.25 million foreclosures in 2010, with similar numbers to follow in 2011 and 2012. Besides putting people in the position of having to find somewhere else to live, the Fed points out that foreclosure can damage the prospects of a comfortable retirement because a home is the main asset for millions of Americans. (Are you facing this situation? Learn more in Know Your Foreclosure Rights.)

3. Chronically Higher Unemployment
The days of 5% unemployment are just fond memories. Currently, the jobless rate stands at 9.6% after rising above 10% in 2009. Where are we going from here? It depends on who you ask. Some economists think unemployment is in a gradual decline. Others, notably those at Goldman Sachs, believe the rate will spike again, peaking at 10.75% in the middle of 2011. In any case, it's probably safe to assume that higher-than-average unemployment will be our constant companion for at least a few more years.

4. A Smaller Chance of Getting Loans or Credit
Like low unemployment, quick home loan approvals and unfettered access to credit are things of the past. Whereas just about anybody could get a credit card or be approved for a mortgage before the economy cratered, now even people who are well-qualified to borrow are having a hard time getting approved. By some estimates, only one out of 10 applications for a home loan are okayed these days. According to the Fed, currently only half of small businesses that apply for loans receive approval. (Learn what pundits mean when they say that stocks are undervalued according to the Fed model. Check out Breaking Down The Fed Model.)

IN PICTURES: 7 Tips To Bounce Back From A Credit Score Disaster

5. A Tougher Time Making Ends Meet
No doubt about it, things have gotten harder in general since the crisis hit, especially for the middle class. A major indicator of that: about six in 10 Americans now say they always or usually live paycheck to paycheck, compared with 49% in 2008 and 43% in 2007. In 2009, the number of Americans who filed for bankruptcy was 1.4 million, 32% more than in 2008. Finding a job takes longer nowadays, too - on average, 35.2 weeks - and 40% of Americans who have a job work in lower-paying service occupations.

Better Days to Come
As grim a picture as statistics like these paint, it's not all bad. For instance, interest rates are at record lows, saving a lot of money on interest for those who can get loans. Inflation has not played a major role in the past year and therefore hasn't been eroding the value of our money. Moreover, economists say the economy is headed in the right direction and should rebound strongly in 2012, so better times are on the way. (Inflation is a natural part of modern life, but there are some ways to cover your assets. To learn more, read Timeless Ways To Protect Yourself From Inflation.)

Find out what happened in financial news this week. Read Water Cooler Finance: GM's Dramatic Return.

Related Articles
  1. Investing

    Why Is Financial Literacy and Education so Important?

    Financial literacy is the confluence of financial, credit and debt knowledge that is necessary to make the financial decisions that are integral to our everyday lives.
  2. Insurance

    What is a Force Majeure?

    A force majeure clause frees both parties in a contract from fulfilling their obligations in the event of some catastrophic or unexpected occurrence.
  3. Credit & Loans

    Explaining Equated Monthly Installments

    An equated monthly installment is a fixed payment a borrower makes to a lender on the same date of each month.
  4. Professionals

    10 Must Watch Documentaries For Finance Professionals

    Find out about some of the best documentaries that finance professionals can watch to gain a better understanding of their industry.
  5. Investing Basics

    Tiny House Movement: Making Market Opportunities

    The tiny house movement throws all assumptions about household budgeting and mortgage management out the window, and creates new market segments too.
  6. Investing

    Where Should I Keep My Down Payment Savings?

    While saving up for a down payment, where should you keep your money. A bank? The stock market? It all depends on your timeline.
  7. Credit & Loans

    Questions To Ask Your Mortgage Lender

    When buying a house, avoid nasty surprises by asking the right questions about your mortgage lender's qualifications and the mortgage process.
  8. Markets

    Is Another Bear Market Ahead?

    With market volatility recently reaching its highest level, investors are questioning what the outlook is for U.S. stocks in 2015 and beyond.
  9. Stock Analysis

    Why Is GE Selling Some of Its Subsidiaries?

    Learn why GE is selling off a substantial amount so it does not have to comply with increased government regulation in the wake of the 2008 financial crisis.
  10. Credit & Loans

    Bad Credit? You Can Still Get a Home Equity Loan

    If your credit history is less than stellar and you need cash, you may be able to get financing – but it will come at a price.
  1. What are the risks of annuities in a recession?

    Annuities come in several forms, the two most common being fixed annuities and variable annuities. During a recession, variable ... Read Full Answer >>
  2. How does the risk of investing in the industrial sector compare to the broader market?

    There is increased risk when investing in the industrial sector compared to the broader market due to high debt loads and ... Read Full Answer >>
  3. What is the correlation between term structure of interest rates and recessions?

    There is no question that interest rates have enormous macroeconomic importance. Many economists and analysts believe the ... Read Full Answer >>
  4. How can I hedge my portfolio to protect from a decline in the retail sector?

    The retail sector provides growth investors with a great opportunity for better-than-average gains during periods of market ... Read Full Answer >>
  5. Why should an investor in the retail sector consider the Consumer Confidence Index?

    Investors in the retail sector should consider the Consumer Confidence Index, or CCI, because it measures how consumers feel ... Read Full Answer >>
  6. Which type of retailers tend to perform best during weak periods in the economy?

    Retail is a broad investment sector comprising many different market segments, such as automotive, building supply, grocery ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  2. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  3. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  4. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  5. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  6. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!