Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter ST5, Problem 2CQ
To determine
Change in credit standards between 1995 and 2005 and its effect on the Great Recession.
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When mortgages originators sell mortgages to Fannie Mae, Freddie Mac, and investment bankers the originators have no additional liability for possible default by the borrow. How will this arrangement influence the incentive of the originators to scrutinize the creditworthiness of the borrow?
Chapter ST5 Solutions
Economics: Private and Public Choice (MindTap Course List)
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