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United_States_Financial_Crisis

United_States_Financial_Crisis - United States Financial...

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United States Financial Crisis Sin Yi, Wong (Christy) Lyle Le Jenny Gip Group 8
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Subprime Mortgage Crisis Drastic increase in defaults and foreclosures of mortgage loans Subprime mortgages: loan option for those with poor credit; characterized by higher interest rates and less favorable borrowing terms o Adjustable-Rate Mortgages (ARMs) Mortgage brokers encouraged many people who were unable to afford houses to take subprime loans Poor borrowing practices regulation
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Loans/mortgages were packed together and sold as securities Large amount of defaults on loans caused many financial institutions to declare for bankruptcy Speculation that large financial institutions like Lehman Brothers, Fannie Mae & Freddie Mac took on riskier investing strategies because of "too big to fail" mentality and would have government bail out just in case
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Late-2000s recession The late-2000s recession, is a severe ongoing global economic problem  that began in December 2007 and took a particularly sharp downward turn  in September 2008.The Great Recession has affected the entire world  economy, with higher detriment in some countries than others. 
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