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Proposal Assignment - October 9 2009 To Dr Linda Northey...

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October 9, 2009 To: Dr. Linda Northey, Instructor From: Jason Jordan Subject: Proposal to Study the Housing Crisis of 2008 and its Subsequent Effect on the Availability of Credit and Loans to Consumers. Americas subprime mortgage crisis is an ongoing financial issue that was triggered by the real estate market crash which began in the early part of the 21st century and became most apparent in 2008. Mortgage delinquencies and foreclosures in the United States and around the world have played a major role in the advancement of this crisis and have since exposed many weaknesses in the regulation of the financial lending industry. For my report I plan to research the causes, damages, and possible solutions that have arouse because of this financial crisis and its ultimate impact on the lending industry. Background Americas housing crisis has had many causes that led us as a nation into the financial situation that we are all experiencing today. In late 2007 our countries housing market had reached a pinnacle and the only other place to go was down, and down it went. As subprime (loans designed for low– to-moderate income sectors) and adjustable rate mortgages began to increase because of massive loan defaults and foreclosures the long-term trend of rising housing prices came to a halt. People began to understand that the low initial finance terms that were sold to them began to end and interest levels began to rise. This led way to a difficult situation for home owners of not being able to eventually pay the high interest mortgages which were to come. The ongoing foreclosure wave that began in early 2006 continues to play a key role even today in the global economic and financial crisis. This is due to the hundreds of thousands of loan defaults, ever falling home prices throughout the country, and even the eventual bankruptcies of many banks and financial institutions.
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