Financial Crisis Of 2007-2008 : The Most Financially Detrimental Event Since The Great Depression

1158 Words Dec 11th, 2015 null Page
The financial crisis of 2007-2008 was the most financially detrimental event since the Great Depression, which had a great effect on investment and banking systems; leading to a recession. One company in particular largely involved was Freddie Mac. Freddie Mac, also named the Federal Home Loan Mortgage Corporation, is a public government sponsored enterprise and designed to expand the secondary market mortgages in the U.S. alongside Fannie Mae (prmia.org). Further discussion will include events leading up to the crisis, how Freddie Mac played a role in the crisis, a personal opinion on who is to blame for the crisis, and relating material back to discussion in class. According to Federal Reserve Bank of St. Louis, “As of February 27, 2007, The Federal Home Loan Mortgage Corporation (Freddie Mac) announces that it will no longer buy the most risky subprime mortgages and mortgage-related securities”. The start of why Freddie Mac and many other major businesses were largely affected was in 2006- 2007 when the American housing market collapsed, not to mention banking systems. President Bush overly promoted the growth of home ownership except he didn 't sufficiently regulate banks and mortgage lenders who were making bad loans. Housing prices had been steadily rising since the end of World War II with fluctuations here and there, but an overall upward trend. Used to be the only way for investors was to buy real estate or invest in construction companies to gain access to…

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