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Old 07-20-2010, 01:15 PM
00smita 00smita is offline
Join Date: Jul 2010
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The US sub-prime crisis in graphics.

The US sub-prime mortgage crisis has lead to plunging property prices, a slowdown in the US economy, and billions in losses by banks. It stems from a fundamental change in the way mortgages are funded.

Traditionally, banks have financed their mortgage lending through the deposits they receive from their customers. This has limited the amount of mortgage lending they could do.

In recent years, banks have moved to a new model where they sell on the mortgages to the bond markets. This has made it much easier to fund additional borrowing,

But it has also led to abuses as banks no longer have the incentive to check carefully the mortgages they issue.

In the past five years, the private sector has dramatically expanded its role in the mortgage bond market, which had previously been dominated by government-sponsored agencies like Freddie Mac.

They specialised in new types of mortgages, such as sub-prime lending to borrowers with poor credit histories and weak documentation of income, who were shunned by the "prime" lenders like Freddie Mac.

size of the mortgage bond market
They also included "jumbo" mortgages for properties over Freddie Mac's $417,000 (202,000) mortgage limit.

The business proved extremely profitable for the banks, which earned a fee for each mortgage they sold on. They urged mortgage brokers to sell more and more of these mortgages.

Privatizing continues to put BILLIONS into the pockets of the already rich and fuck over everyone else ...

Enjoy ur toil dumbasses ...
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Old 07-20-2010, 05:01 PM
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Dragon Dragon is offline
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Yet it is our national debt that continues to grow, big government lackey.
Sorry, if you can not make it in adult world, not the rest of ours fault.

Also it was our "public" sector that has pushed for unsafe mortgages to those that can not afford homes in this nation.

So please be honest on here, 00smita.
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