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Why did actual home buyers/ borrowers start defaulting in the financial crisis of 2007/2008?
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- Discuss how the subprime mortgage crisis of 2007 was based upon the flawed financial model that house prices only increase.How did a decline in housing prices help trigger the subprime financial crisis that began in 2007? Explain.Which of the following was NOT a direct and major consequence of the 2007-2009 U.S. Subprime Financial Crisis? Group of answer choices a. Small consumer and household savers lost all their money they had in savings accounts due to the failure of many smaller FDIC member banks b. Many people lost their homes when they could no longer make their payments after their subprime mortgage rates reset to a much higher rate after two years c. Lehman suffered a major financial collapse and ultimately was dissolved after many of its remaining parts were purchased by Barclays and Nomura, among others d. The U.S. stock markets dropped dramatically as the credit fueled economy of the mid-2000s started to suffer after the credit bubble began to burst.
- How has the credit crisis May have adversely affected many homeowners and mortgage companies?Define the following terms and explain why they were important during the housing and credit crisis of 2007-2009 a.Securitization b. Subprime loan c. Asset write-downDuring the 2008 recession, large financial institutions including investment and insurance companies, were at risk of bankruptcy due to the sub-prime mortgage crisis. Which element of insurance risk best demonstrates this concept? A. the loss produced by the risk must be definite B. the loss produced by the risk must be measurable C. the loss must not be catastrophic D. the loss must be fortuitous or accidental
- A. What is the subprime mortgage market? B. What important role did these subprime mortgages play in the 2008 Financial Crisis?Which of the following was NOT a direct and major consequence of the 2007-2009 U.S. Subprime Financial Crisis? a. Small consumer and household savers lost all their money they had in savings accounts due to the failure of many smaller FDIC member banks b. Many people lost their homes when they could no longer make their payments after their subprime mortgage rates reset to a much higher rate after two years c. Lehman suffered a major financial collapse and ultimately was dissolved after many of its remaining parts were purchased by Barclays and Nomura, among others d. The U.S. stock markets dropped dramatically as the credit fueled economy of the mid-2000s started to suffer after the credit bubble began to burst.What does default mean? Does it occur only when borrowers fail to make scheduled loan payments?
- The financial regulations governing the banking sector and most importantly mortgage-backed asset, did not prevent or alleviated the financial collapse in 2008/9? Critically discuss?who are the guardians of finance and did they play a role in the housing boom and bust, and subsequent severe recession?The economy is said to be entering a recession but your company needs to borrow money for an immediate need. Should you borrow on a long-term or short-term basis? Why?