What are similarities between the 1929 stock market crash and the sub-prime mortgage crash today?
Q. I have to write a social studies essay on the similarities between the 1929 stock market crash and the sub-prime mortgage crash. I need 3 good points, and I have to expand on every one of them, so I would appreciate some detail. Great! Thanks a lot
Asked by Bob.Builder - Tue Mar 31 22:03:18 2009 - - 3 Answers - 0 Comments
A. 1. Both times, credit was easy to get. In both times, people could borrow easily. 2 Both time, there was rampant speculation which created bubbles In the 20's, the speculation was in stocks, which led to a huge bubble in the stock market. in the current period, the speculation was in housing, which led to a huge buble in the housing market. 3. In both cases, government regulation was weak. In the 20's leading up to the crash, the two presidents were Warren Harding and Calvin Coolidge, both of whom essentially had the belief that they should to as little as possible. In both terms, the government regulation was weak, leading to poor decisions being made by the banks. In the current times, George Bush believed very strongly… [cont.]
Answered by WarrenBB - Wed Apr 1 17:59:29 2009
Q. I have to write a social studies essay on the similarities between the 1929 stock market crash and the sub-prime mortgage crash. I need 3 good points, and I have to expand on every one of them, so I would appreciate some detail. Great! Thanks a lot
Asked by Bob.Builder - Tue Mar 31 22:03:18 2009 - - 3 Answers - 0 Comments
A. 1. Both times, credit was easy to get. In both times, people could borrow easily. 2 Both time, there was rampant speculation which created bubbles In the 20's, the speculation was in stocks, which led to a huge bubble in the stock market. in the current period, the speculation was in housing, which led to a huge buble in the housing market. 3. In both cases, government regulation was weak. In the 20's leading up to the crash, the two presidents were Warren Harding and Calvin Coolidge, both of whom essentially had the belief that they should to as little as possible. In both terms, the government regulation was weak, leading to poor decisions being made by the banks. In the current times, George Bush believed very strongly… [cont.]
Answered by WarrenBB - Wed Apr 1 17:59:29 2009
Is the sub prime lending crises due to banks trying to unload mortgages/bussiness loans of illegal alians?
Q. What are the major "low" lending standards that has caused the "sub prime" mortgages crises?
Asked by socialanimal - Sun Oct 14 12:05:44 2007 - - 3 Answers - 0 Comments
A. It mainly dealt with subprime mortgages (people with bad credit given terrible mortgages with bad terms) and other adjustable rate mortgages. These loans were made to many different people, not illegal aliens. These mortgages did not have fixed interest rates. When you have an ARM (Adjustable Rate Mortgage) your payment goes up after the teaser rate period ends. Needless to say, many people did not understand their mortgages when they signed up for them and when their payments went up, they were unable to make them which lead to foreclosures. I directly work with corporate finance and what are called asset backed securities and mortgage backed securities. These are loans that are grouped together and "securitized" and then sold off as… [cont.]
Answered by aecruiser - Sun Oct 14 12:18:17 2007
Q. What are the major "low" lending standards that has caused the "sub prime" mortgages crises?
Asked by socialanimal - Sun Oct 14 12:05:44 2007 - - 3 Answers - 0 Comments
A. It mainly dealt with subprime mortgages (people with bad credit given terrible mortgages with bad terms) and other adjustable rate mortgages. These loans were made to many different people, not illegal aliens. These mortgages did not have fixed interest rates. When you have an ARM (Adjustable Rate Mortgage) your payment goes up after the teaser rate period ends. Needless to say, many people did not understand their mortgages when they signed up for them and when their payments went up, they were unable to make them which lead to foreclosures. I directly work with corporate finance and what are called asset backed securities and mortgage backed securities. These are loans that are grouped together and "securitized" and then sold off as… [cont.]
Answered by aecruiser - Sun Oct 14 12:18:17 2007
Who supported giving sub prime loans that tanked this economy?
Q. I always hear the economy sank once people defaulted on their home loans and that they would have never qualified for a loan in the first place had it not been for sub prime business. So who supported giving sub prime home loans, and aren't they to blame for the tanking economy?
Asked by web_trace - Thu Oct 30 09:26:17 2008 - - 2 Answers - 0 Comments
A. Bill Clinton was ultimately responsible. It started in his presidency around 1996, but was solidified in 1998.(That was when the Green light to me was given to sign away on loans I would have never ever bought! or could have) I was in Mortgages, and I was an underwriter. We use to have a tight restriction policy when it came to housing to debt ratio. Housing could only be 35% of your total debt. Also 2 years on the job, 5 years same line of work, and live in your residence at least 1 year. 10% minimal down payment and you had to have comparable credit. This meant if you were going to borrow $100K you had to have at least a 100k in paid back credit. Every thing must be verified in writing. Then all of a sudden we, as underwriters, were… [cont.]
Answered by 2U2 - Sun Nov 2 21:02:20 2008
Q. I always hear the economy sank once people defaulted on their home loans and that they would have never qualified for a loan in the first place had it not been for sub prime business. So who supported giving sub prime home loans, and aren't they to blame for the tanking economy?
Asked by web_trace - Thu Oct 30 09:26:17 2008 - - 2 Answers - 0 Comments
A. Bill Clinton was ultimately responsible. It started in his presidency around 1996, but was solidified in 1998.(That was when the Green light to me was given to sign away on loans I would have never ever bought! or could have) I was in Mortgages, and I was an underwriter. We use to have a tight restriction policy when it came to housing to debt ratio. Housing could only be 35% of your total debt. Also 2 years on the job, 5 years same line of work, and live in your residence at least 1 year. 10% minimal down payment and you had to have comparable credit. This meant if you were going to borrow $100K you had to have at least a 100k in paid back credit. Every thing must be verified in writing. Then all of a sudden we, as underwriters, were… [cont.]
Answered by 2U2 - Sun Nov 2 21:02:20 2008
What is a sub-prime rate loans? Are they a good loan to get for a house?
Q. I'm not familure with this sub-prime mess that is going on with mortages these days. Can someone explain this to me? Thanks.
Asked by J.R. M - Thu Dec 6 10:14:31 2007 - - 3 Answers - 0 Comments
A. Sub-prime refers to the credit ratings of the borrowers. Because their credit ratings are poor, they generally pay much more in interest for loans or have to use creative financing (ARMs, etc.) to afford a home. You don't choose a sub-prime loan, if you are a sub-prime borrower you end up in one... A prime borrower had great credit, verified income, etc. and was eligible for the best rates.
Answered by Rush is a band - Thu Dec 6 12:34:04 2007
Q. I'm not familure with this sub-prime mess that is going on with mortages these days. Can someone explain this to me? Thanks.
Asked by J.R. M - Thu Dec 6 10:14:31 2007 - - 3 Answers - 0 Comments
A. Sub-prime refers to the credit ratings of the borrowers. Because their credit ratings are poor, they generally pay much more in interest for loans or have to use creative financing (ARMs, etc.) to afford a home. You don't choose a sub-prime loan, if you are a sub-prime borrower you end up in one... A prime borrower had great credit, verified income, etc. and was eligible for the best rates.
Answered by Rush is a band - Thu Dec 6 12:34:04 2007
Is it true that the Democrats mandated that the mortgage companies give sub-prime loans?
Q. I heard that during the Clinton administration, the Democrat-run Congress forced mortgage companies to give sub-prime mortgages, and also that borrowers would not be required to have social security numbers (allowing illegal aliens to get mortgages). Does anyone have a reference for these claims?
Asked by Tom S - Mon Oct 13 19:59:07 2008 - - 8 Answers - 0 Comments
A. Yes it is true. Democrats through legislation and intimidation forced banks to make loans to people who otherwise couldn't have qualified for them. But that's only a single slice of the pie. There were many fathers of this financial crisis we're in now. Each one of them is pointing fingers at someone else.
Answered by Uncle Pennybags - Mon Oct 13 20:03:34 2008
Q. I heard that during the Clinton administration, the Democrat-run Congress forced mortgage companies to give sub-prime mortgages, and also that borrowers would not be required to have social security numbers (allowing illegal aliens to get mortgages). Does anyone have a reference for these claims?
Asked by Tom S - Mon Oct 13 19:59:07 2008 - - 8 Answers - 0 Comments
A. Yes it is true. Democrats through legislation and intimidation forced banks to make loans to people who otherwise couldn't have qualified for them. But that's only a single slice of the pie. There were many fathers of this financial crisis we're in now. Each one of them is pointing fingers at someone else.
Answered by Uncle Pennybags - Mon Oct 13 20:03:34 2008
have any one been successful in getting out of a sub prime mortgage deal?
Q. "have any one been successful in getting out of a sub prime mortgage deal or know of any programs?
Asked by Latoya B - Mon Jun 16 14:53:25 2008 - - 3 Answers - 0 Comments
A. Currently, most of our borrowers who had subprime loans are refinancing into fixed rate FHA loans. FHA is not score driven HOWEVER lenders are. Most require a 580 to qualify. We can go down to a 530 score but the loan has to make sense. It is also possible to refi your house if you are in an ARM and it has adjusted causing you to fall behind on the mortgage. Through the FHA Secure program you can refinance into a lower fixed rate mortgage. This is not score driven but you must have had decent credit BEFORE the ARM adjusted. If you need additional info on these programs, feel free to email me.
Answered by markmyword - Mon Jun 16 15:45:31 2008
Q. "have any one been successful in getting out of a sub prime mortgage deal or know of any programs?
Asked by Latoya B - Mon Jun 16 14:53:25 2008 - - 3 Answers - 0 Comments
A. Currently, most of our borrowers who had subprime loans are refinancing into fixed rate FHA loans. FHA is not score driven HOWEVER lenders are. Most require a 580 to qualify. We can go down to a 530 score but the loan has to make sense. It is also possible to refi your house if you are in an ARM and it has adjusted causing you to fall behind on the mortgage. Through the FHA Secure program you can refinance into a lower fixed rate mortgage. This is not score driven but you must have had decent credit BEFORE the ARM adjusted. If you need additional info on these programs, feel free to email me.
Answered by markmyword - Mon Jun 16 15:45:31 2008
What is the Prime crisis, if what we have now is a sub-prime crisis?
Q. We hear a lot about the current economic crisis grippling the US economy now but fast spreading all over as the sub-prime crisis. Wd someone explain why it is called so?
Asked by sunny - Wed Oct 22 14:13:48 2008 - - 1 Answers - 0 Comments
A. Sub-prime describes the state of the borrower in a home loan situation. A "sub-prime" borrower generally tends to have a higher risk of default, such as those who have a history of loan delinquency or default, those with a recorded bankruptcy, or those with limited debt experience. There is no such thing as a "prime crisis"
Answered by Ankur - Wed Oct 22 14:27:02 2008
Q. We hear a lot about the current economic crisis grippling the US economy now but fast spreading all over as the sub-prime crisis. Wd someone explain why it is called so?
Asked by sunny - Wed Oct 22 14:13:48 2008 - - 1 Answers - 0 Comments
A. Sub-prime describes the state of the borrower in a home loan situation. A "sub-prime" borrower generally tends to have a higher risk of default, such as those who have a history of loan delinquency or default, those with a recorded bankruptcy, or those with limited debt experience. There is no such thing as a "prime crisis"
Answered by Ankur - Wed Oct 22 14:27:02 2008
Where is a good place to get a sub prime auto loan?
Q. Who are the top sub prime auto loan lenders? I need to get a auto loan. I have a bankruptcy on my credit report. I realize I'm not going to get a great rate, but I don't want to get screwed over too badly. Are there any websites besides lending tree, that shop multiple lenders?
Asked by DryHeevz - Tue Apr 6 17:54:48 2010 - - 3 Answers - 0 Comments
Q. Who are the top sub prime auto loan lenders? I need to get a auto loan. I have a bankruptcy on my credit report. I realize I'm not going to get a great rate, but I don't want to get screwed over too badly. Are there any websites besides lending tree, that shop multiple lenders?
Asked by DryHeevz - Tue Apr 6 17:54:48 2010 - - 3 Answers - 0 Comments
Did you fall for a sub prime teaser Mtge and What is your party affiliation?
Q. Curious as to how many YA politics posters fell for the slight of hand of sub prime ARM's and what are your political leanings. Thanks
Asked by hillarysclam - Wed Sep 24 20:00:44 2008 - - 4 Answers - 0 Comments
A. Got a fixed 5.75 mortgage 3 years ago. I do have a couple of brain cells left.I do not feel sorry for these people at all. Most knew what they were doing hoping things would change. Conservative Republican
Answered by Mel - Wed Sep 24 20:08:15 2008
Q. Curious as to how many YA politics posters fell for the slight of hand of sub prime ARM's and what are your political leanings. Thanks
Asked by hillarysclam - Wed Sep 24 20:00:44 2008 - - 4 Answers - 0 Comments
A. Got a fixed 5.75 mortgage 3 years ago. I do have a couple of brain cells left.I do not feel sorry for these people at all. Most knew what they were doing hoping things would change. Conservative Republican
Answered by Mel - Wed Sep 24 20:08:15 2008
Is this sub-prime meltdown going to cause a bigger dent in the job/labor market?
Q. I just recently went back to school to get a more marketable degree. But just last week, I went to a job/career fair and discovered that a lot of people are still looking for work. I'm afraid that this sub-prime mess is going to make the job market even worse than it already is. I hope that I made the right decision to go back to school to get a better degree. What do you think?
Asked by Yay Ah! - Sun Mar 9 12:57:14 2008 - - 2 Answers - 0 Comments
A. More than likely there will an effect to some degree. Investments made by businesses may see a "lower return" on their money due to the market share of available money. Investors, mainly in the "bond market", selling/buying support the mortgage industry and sub-prime was "big" business due to the number of home loans under these programs. The failure of home owners acquiring these type loans as well as Interest Only and their inability to be able to pay the adjusted rates is now being paid for by all citizens, reducing budgets of business as well. You are doing what many are not, making yourself more marketable. Businesses are hiring at certain levels and specific positions. My girlfriend recently went on an interview for a highly… [cont.]
Answered by Bruce T - Mon Mar 10 05:26:52 2008
Q. I just recently went back to school to get a more marketable degree. But just last week, I went to a job/career fair and discovered that a lot of people are still looking for work. I'm afraid that this sub-prime mess is going to make the job market even worse than it already is. I hope that I made the right decision to go back to school to get a better degree. What do you think?
Asked by Yay Ah! - Sun Mar 9 12:57:14 2008 - - 2 Answers - 0 Comments
A. More than likely there will an effect to some degree. Investments made by businesses may see a "lower return" on their money due to the market share of available money. Investors, mainly in the "bond market", selling/buying support the mortgage industry and sub-prime was "big" business due to the number of home loans under these programs. The failure of home owners acquiring these type loans as well as Interest Only and their inability to be able to pay the adjusted rates is now being paid for by all citizens, reducing budgets of business as well. You are doing what many are not, making yourself more marketable. Businesses are hiring at certain levels and specific positions. My girlfriend recently went on an interview for a highly… [cont.]
Answered by Bruce T - Mon Mar 10 05:26:52 2008
What is the current fuss over sub-prime loans?
Q. What are sub-prime loans, anyway? Any advice would be appreciated.
Asked by Silent Kninja - Wed Nov 14 11:53:13 2007 - - 6 Answers - 0 Comments
A. Prime market is good risk (for lenders). Sub-prime is bad risk. People who were bad risks and were lent too much money (basically at a level they couldn't afford to repay longterm) are defaulting on their loans in fairly large amounts. Because banks (in effect) sell loans to other banks worldwide no one really knows who (in bank terms) has the most exposure to these loans and so no one is too sure which banks may hit trouble. This means people are more wary about their own deposits and are putting them in 'safer' places meaning there's much less fluid money in the system. The ultimate fear is that it could lead to the downfall of a bank or other financial institution which would send a ripple through all the world markets. … [cont.]
Answered by ein - Wed Nov 14 11:59:44 2007
Q. What are sub-prime loans, anyway? Any advice would be appreciated.
Asked by Silent Kninja - Wed Nov 14 11:53:13 2007 - - 6 Answers - 0 Comments
A. Prime market is good risk (for lenders). Sub-prime is bad risk. People who were bad risks and were lent too much money (basically at a level they couldn't afford to repay longterm) are defaulting on their loans in fairly large amounts. Because banks (in effect) sell loans to other banks worldwide no one really knows who (in bank terms) has the most exposure to these loans and so no one is too sure which banks may hit trouble. This means people are more wary about their own deposits and are putting them in 'safer' places meaning there's much less fluid money in the system. The ultimate fear is that it could lead to the downfall of a bank or other financial institution which would send a ripple through all the world markets. … [cont.]
Answered by ein - Wed Nov 14 11:59:44 2007
do homeowners need to take some of the blame for sub prime loans?
Q. my boyfriend and i recently bought a new townhome. its not our dream house, but we wanted a starter home so we were not over our heads. we did LOTS of research on pricing and mortgage rates before we signed anything. i know that people dont buy starter homes like the used too and i was wondering if anyone else agrees that if alot of these homeowners had took the time to really investigate about sub prime lending would they not be in the mess they are in now?
Asked by raychels mom - Wed Feb 13 13:15:25 2008 - - 1 Answers - 0 Comments
A. You are certainly correct.
Answered by jlf - Wed Feb 13 13:30:26 2008
Q. my boyfriend and i recently bought a new townhome. its not our dream house, but we wanted a starter home so we were not over our heads. we did LOTS of research on pricing and mortgage rates before we signed anything. i know that people dont buy starter homes like the used too and i was wondering if anyone else agrees that if alot of these homeowners had took the time to really investigate about sub prime lending would they not be in the mess they are in now?
Asked by raychels mom - Wed Feb 13 13:15:25 2008 - - 1 Answers - 0 Comments
A. You are certainly correct.
Answered by jlf - Wed Feb 13 13:30:26 2008
where can i get the automobile industry analysis and how it is affected by the sub prime crisis?
Q. Where can i get details as to why and how the automobile industry got affected by the sub prime crisis and the possible solution for its recovery
Asked by Megha - Wed Dec 24 06:21:58 2008 - - 1 Answers - 0 Comments
A. Wall Street Journal (free at the library)..
Answered by Ed Atun - Wed Dec 24 07:18:37 2008
Q. Where can i get details as to why and how the automobile industry got affected by the sub prime crisis and the possible solution for its recovery
Asked by Megha - Wed Dec 24 06:21:58 2008 - - 1 Answers - 0 Comments
A. Wall Street Journal (free at the library)..
Answered by Ed Atun - Wed Dec 24 07:18:37 2008
Why is the market reacting so negatively to the sub-prime lending issues?
Q. sub-prime lenders give loans to people with bad credit. It's a small segment of the market. The news is coming out that people are defaulting on these loans.. Why is this suprising? it's a sub prime market. Of course risky loans to people with bad credit are going to be defaulted on. The market is plummeting on this news as if it is a suprise somehow. What gives?
Asked by Louis G - Tue Mar 13 16:55:30 2007 - - 2 Answers - 0 Comments
A. You are correct that it is a small segment of the market but one that represents billions of dollars. Correct also is that these are riskier loans and they should not be blind to the repercussions of loaning money to questionable borrowers. The rub is that several lenders, correspondent lenders and brokers with poor policing have taken the already liberal sub prime quidelines and then fudged on the borrowers application for income and other areas. The foreclosure scenario we all see now has resulted in review of these loans and in general fraud and deception has not been uncommon. Wall Street is screaming because they bought these loans based on the guidelines unaware (supposedly) of the the rampant abuse. People who had no business… [cont.]
Answered by Charlie - Tue Mar 13 18:41:26 2007
Q. sub-prime lenders give loans to people with bad credit. It's a small segment of the market. The news is coming out that people are defaulting on these loans.. Why is this suprising? it's a sub prime market. Of course risky loans to people with bad credit are going to be defaulted on. The market is plummeting on this news as if it is a suprise somehow. What gives?
Asked by Louis G - Tue Mar 13 16:55:30 2007 - - 2 Answers - 0 Comments
A. You are correct that it is a small segment of the market but one that represents billions of dollars. Correct also is that these are riskier loans and they should not be blind to the repercussions of loaning money to questionable borrowers. The rub is that several lenders, correspondent lenders and brokers with poor policing have taken the already liberal sub prime quidelines and then fudged on the borrowers application for income and other areas. The foreclosure scenario we all see now has resulted in review of these loans and in general fraud and deception has not been uncommon. Wall Street is screaming because they bought these loans based on the guidelines unaware (supposedly) of the the rampant abuse. People who had no business… [cont.]
Answered by Charlie - Tue Mar 13 18:41:26 2007
what is the difference between prime and sub prime credit?
Q. what is the difference between prime and sub prime credit?
Asked by Deep eyes - Fri Mar 7 05:05:00 2008 - - 2 Answers - 0 Comments
A. oops!! don know...(No points this time =(...ugh) Next time ask an easy one!!! hehehehehe... Sowi... =(
Answered by WaTsOeVa - Mon Mar 10 21:19:10 2008
Q. what is the difference between prime and sub prime credit?
Asked by Deep eyes - Fri Mar 7 05:05:00 2008 - - 2 Answers - 0 Comments
A. oops!! don know...(No points this time =(...ugh) Next time ask an easy one!!! hehehehehe... Sowi... =(
Answered by WaTsOeVa - Mon Mar 10 21:19:10 2008
What are the changes in liquidity in the Australian bond market due to the sub-prime mortgage crisis in the US?
Q. Do investors quickly sell off their corporate bonds after finding out that these bonds may be exposed to the sub-prime crisis? or do they hold onto it cause the credit spread is getting larger and they may earn more interest?
Asked by blah - Sun Oct 12 04:21:55 2008 - - 1 Answers - 0 Comments
A. this is everyones question and a good one! i have found the best to buy now is the 13 week t-bills from the US FEDS... keep your cash available for special purchases coming up in real estate/china mtg stocks/ and gold as the market crashes even further... those bonds have been invested in defunct housing in the USA... enough said! your liquidity is not there!
Answered by betotron don - Sun Oct 12 04:35:48 2008
Q. Do investors quickly sell off their corporate bonds after finding out that these bonds may be exposed to the sub-prime crisis? or do they hold onto it cause the credit spread is getting larger and they may earn more interest?
Asked by blah - Sun Oct 12 04:21:55 2008 - - 1 Answers - 0 Comments
A. this is everyones question and a good one! i have found the best to buy now is the 13 week t-bills from the US FEDS... keep your cash available for special purchases coming up in real estate/china mtg stocks/ and gold as the market crashes even further... those bonds have been invested in defunct housing in the USA... enough said! your liquidity is not there!
Answered by betotron don - Sun Oct 12 04:35:48 2008
Are there other countries other than in the US that gave out sub prime loans?
Q. Are there other countries other than in the US that gave out sub prime loans? I mean is it legal in other countries to lend money that is not yours to someone who does not have collateral (like 0 down) and you know has a terrible credit history?
Asked by Neil - Mon Oct 13 14:52:34 2008 - - 1 Answers - 0 Comments
A. The subprime loans originated from this great country. GWB admitted this during weekend's G7 and G20 meeting. In China, people have to pay 30% down payment and there is no such thing called equity loans there. That why China is the least affected by this banking crisis.
Answered by Confused ... - Mon Oct 13 16:00:34 2008
Q. Are there other countries other than in the US that gave out sub prime loans? I mean is it legal in other countries to lend money that is not yours to someone who does not have collateral (like 0 down) and you know has a terrible credit history?
Asked by Neil - Mon Oct 13 14:52:34 2008 - - 1 Answers - 0 Comments
A. The subprime loans originated from this great country. GWB admitted this during weekend's G7 and G20 meeting. In China, people have to pay 30% down payment and there is no such thing called equity loans there. That why China is the least affected by this banking crisis.
Answered by Confused ... - Mon Oct 13 16:00:34 2008
Shouldn't the borrowers of lame sub prime teaser mtges have to "pay the Piper"?
Q. I am tired of hearing about "predatory" lenders. The borrowers of these "made for moron sub prime mortgages" were guilty of greed and stupidity. No one forced them to sign and enter into mtges they could not afford. As Marie Antoinette once said..."let them eat cake".
Asked by hillarysclam - Mon Sep 29 06:35:01 2008 - - 9 Answers - 0 Comments
A. I agree. Everyone is warned about the "fine print" from the time you're in the cradle. Caveat Emptor!
Answered by Nikki - Mon Sep 29 07:49:44 2008
Q. I am tired of hearing about "predatory" lenders. The borrowers of these "made for moron sub prime mortgages" were guilty of greed and stupidity. No one forced them to sign and enter into mtges they could not afford. As Marie Antoinette once said..."let them eat cake".
Asked by hillarysclam - Mon Sep 29 06:35:01 2008 - - 9 Answers - 0 Comments
A. I agree. Everyone is warned about the "fine print" from the time you're in the cradle. Caveat Emptor!
Answered by Nikki - Mon Sep 29 07:49:44 2008
Would it be wise for the government to bail out those stupid people that took advantage of sub prime loans?
Q. Would it be wise for the government to bail out those stupid people that took advantage of sub prime loans? I believe you are responsible for your own choices and you should pay the price for your decisions Last Friday the U.S. Federal Reserve cut the rate at which it makes direct loans to banks, sending a signal to Wall Street that it is aware of the credit contraction that has hit global financial markets. At the same time, the Fed wisely refrained from lowering its target federal-funds rate, through which it controls monetary policy, although Fed officials have indicated that a cut could be in the offing if markets don t stabilize soon. The Bush administration has also demonstrated admirable restraint, resisting calls to let troubled… [cont.]
Asked by mission_viejo_california - Tue Aug 21 11:43:00 2007 - - 5 Answers - 0 Comments
A. No. we would be bailing out the lenders, not those who have lost their homes.
Answered by wisdomforfools - Tue Aug 21 11:48:29 2007
Q. Would it be wise for the government to bail out those stupid people that took advantage of sub prime loans? I believe you are responsible for your own choices and you should pay the price for your decisions Last Friday the U.S. Federal Reserve cut the rate at which it makes direct loans to banks, sending a signal to Wall Street that it is aware of the credit contraction that has hit global financial markets. At the same time, the Fed wisely refrained from lowering its target federal-funds rate, through which it controls monetary policy, although Fed officials have indicated that a cut could be in the offing if markets don t stabilize soon. The Bush administration has also demonstrated admirable restraint, resisting calls to let troubled… [cont.]
Asked by mission_viejo_california - Tue Aug 21 11:43:00 2007 - - 5 Answers - 0 Comments
A. No. we would be bailing out the lenders, not those who have lost their homes.
Answered by wisdomforfools - Tue Aug 21 11:48:29 2007
Home loans with low down payments require PMI insurance, so why are banks losing money on sub-prime mortgages?
Q. A home loan with less than 20% down requires PMI (Private Mortgage Insurance). Since most "sub-prime" mortgages would require PMI, why are banks losing so much money on these loans? Shouldn't it be the insurance companies that lose the money?
Asked by cmsb705 - Sat Mar 15 20:23:40 2008 - - 2 Answers - 0 Comments
A. There isn't any PMI on subprime loans, so the answer is NO. A few years ago when the subprime market was at it's peak, millions of these loans were underwritten and approved. They were typically 2/28 ARM loans and PMI insurance companies would not even insure these loans. The interest rates were high to start with, but fixed for 2 years. The plan was for the borrowers to clean their credit up before the 2 year period was up and then to refinance into a low fixed rate mortgage. Unfortunately, this didn't happen and borrowers who could barely afford the initial payment, certainly couldn't afford the increased payment when the adjustment took place. PMI insurance is for credit--worthy loans, not subprime loans. Banks are losing so much… [cont.]
Answered by CINDY W - Sat Mar 15 20:40:01 2008
Q. A home loan with less than 20% down requires PMI (Private Mortgage Insurance). Since most "sub-prime" mortgages would require PMI, why are banks losing so much money on these loans? Shouldn't it be the insurance companies that lose the money?
Asked by cmsb705 - Sat Mar 15 20:23:40 2008 - - 2 Answers - 0 Comments
A. There isn't any PMI on subprime loans, so the answer is NO. A few years ago when the subprime market was at it's peak, millions of these loans were underwritten and approved. They were typically 2/28 ARM loans and PMI insurance companies would not even insure these loans. The interest rates were high to start with, but fixed for 2 years. The plan was for the borrowers to clean their credit up before the 2 year period was up and then to refinance into a low fixed rate mortgage. Unfortunately, this didn't happen and borrowers who could barely afford the initial payment, certainly couldn't afford the increased payment when the adjustment took place. PMI insurance is for credit--worthy loans, not subprime loans. Banks are losing so much… [cont.]
Answered by CINDY W - Sat Mar 15 20:40:01 2008
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Sat, 10 Jul 2010 11:06:00 GM
Big banks such as Wells Fargo are ending the practice of having separate outlets that provide higher-cost credit to riskier borrowers, the latest sign of the demise of . subprime. lending, one of the key causes of the financial crisis.
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