Would the subprime crisis happen if property supply did not grow so fast or high?

Answers:2   |   LastUpdateAt:2012-11-03 10:19:03  

Question
Alyssa Pacheco
Asked at 2012-09-02 12:46:03
subprime was doing so well and the houses were built , right? MedlinePlus ates of interest and then went to the monthly payments or anything like that , and basically monthly payments soared. and other things that eventually led many subprime borrowers to keep their payments and foreclose on their homes ? MedlinePlus MedlinePlus what investors thought property values ​​always go up . subprime mortgages were traded on the market . but the value of homes dropped because too many houses , more executions , and the houses lose value relative to the initial assessment . their actions are perceived to be worth less . lowers confidence and people sell sell sell . yes ? MedlinePlus MedlinePlus Well, I do not understand why sell sell sell lead to the collapse of a company , but that's a different issue . if you do, then my question is, what happens if the subprime households still taken back by the lenders did not lose value ? if the initial loan was $ 100,000, and until the borrower has returned $ 10,000 ( whether principal or interest ) , then by default and the lender takes the house and the house is worth $ 90,000 and the manages to sell at that price , then what is the problem than nonprofit are doing ? MedlinePlus MedlinePlus
Answer1Qt31095Answered at 2012-09-08 09:17:03
MedlinePlus MedlinePlus Yes Because high-risk people were let into the market due to loan originators could sell a loan with zero documentation , and then turn around and resell the loan to Bear Stearns and recover all their money . As such , no matter what was happening in the housing market , as the source of the problem was about the possibility of granting loans to anyone with a heartbeat , and then resell the loan , and transfer all the risk to Wall Street . MedlinePlus MedlinePlus
Related Questions
1
  • Answer This Question:Would the subprime crisis happen if property supply did not grow so fast or high?