11/10/2011

Subprime mortgage crisis

As you could have learned from earlier posts, most of the economic crises start in good times when greed and speculation prevail over the common sense. In March 2007, the United States sub-prime mortgage market witnessed higher-than-expected home foreclosure rates which started a collapse forcing more than 25 sub-prime lenders to declare bankruptcy. Were the expectations wrong? No doubt. While securitization of mortgage market attracted large quantities of money, it allowed banks to basically sell the mortgages thus distributing credit risk to investors. Since risk could be transferred banks allowed more loans than usual, constantly lowering the criteria. Eventually, people who normally wouldn't be able to purchase a home started refinancing their new ventures through mortgages. But when the home prices started to fall, old bills resurfaced and the entire market was shocked with the numerous foreclosures. Bubble burst caused a loss in trillions of dollars, brought the financial sector to the edge of the cliff and created the seed for the global scale crisis. Read more information about the Subprime mortgage crisis critical events here.









1 komentar:

  1. BREAKING NEWS: USD Currency Collapse

    China Causes The USD To Fall?

    USD Dollar Drops 50% In Value Overnight?

    Hey there

    I don’t know you have heard this yet…

    But the USD Dollar is on the verge of collapse.

    In fact since 1973 it’s been on a downward trend…

    Dollar-Index-Past-Forty-Years

    USD national debt is at an all time high and now financial experts are saying that China is starting to sell their debt holdings to the secondary market.

    This means it won’t be too long until the USD crumbles in value!

    >>Watch This Video To Learn More<<

    I don’t want to be the bringer of bad news, but this is seriously not good for the US since we already have domestic problems of our own, such as immigration and unemployment.

    Our economy can not withstand another hit.

    This time the USD might actually collapse.

    >>Watch This Video To Learn More<<

    Make sure you watch it before it’s taken offline.

    Speak soon.

    [Mr Mark Fidelman]

    OdgovoriIzbriši