Subprime lending

From 2008 through 2012, 481 FDIC insured banks were either liquidated or merged with healthier institutions. Credit Unions saw 136 involuntary liquidations or assisted mergers at the hands of the National Credit Union Share Insurance Fund. In 2009, Credit Unions saw their delinquency for mortgage loans peak at 1.61 percent compared to 8.86 percent at the banks. Many of the largest corporate credit unions in the United States invested in troubled mortgage-backed securities which resulted in…

Bankruptcy is when you have no money or value at all. “In the United States, early federal bankruptcy laws were temporary responses to bad economic conditions. The first official bankruptcy law was in 1800 in response to land speculation, but it was repealed in 1803. Also in 1841, a second bankruptcy law was passed, but this law was quickly repealed in 1843.” Bankruptcy is important because when a debt is removed as part of a bankruptcy process, we would then say that the debt is dismissed. By…

THE PROBLEM Bear Stearns sponsored two hedge funds through its subsidiary, Bear Stearns Asset Management. The main fund, the High-Grade Structured Credit Strategies Fund, was made up of complex derivatives backed by home mortgages. During most of its life it was highly profitable but as the housing market began to stutter in late 2006 the returns suffered. This fund was leveraged at 35 times its invested funds. As the market worsened the returns of the two funds sank. In urging investors to stay…

Archway & Mother’s Cookie Company was a gourmet cookie company that was one of the top salaries and makers in the United States. It started in 1936 with the Harold and Ruth Swason staring their company in their garage in Battle Creek MI. In 1980 there was new ownership, Thomas Olin and Eugene McKay, Jr. Both. During this time, began the cookie war, could be viewed as the start to the downfall of Archway & Mother’s Cookies Company, which closed in 2009. “Archway Cookies, Inc. is one of the top…

Agencies." Law In Context 30, no. 1: 114-145.) During the crisis, the Credit Rating Agencies (CRA) generally failed to provide accurate assessment on the risks of subprime mortgage related securities. Actually, the CRA like Moody and S&P gave high rating on those securities. In 2007, the senior tranche of the CDO, which involved subprime mortgages, received the highest rating of…

The housing crisis affects millions of Americans because of many peoples income and not being able to afford it . Many government programs are established to help many people . In different places housing prices are different . The better the environment the higher the prices . The not as good quality the environment the lower the cost . There have been many programs that have been established to help with poverty . In inner cities the price of housing is much lower because of the…

estate scandal that came as a result led to the former Prime Minister Kostas Karamanlis to be ousted from power in October 2009. When a new government was formed, there was little money left in the government’s coffers so they had to come clean about the true state of things. The revelations coupled with the new higher interest rates which the country was forced to pay caused panic among investors. Mr Lewis uncanny ability to weave stories into a sharp-edged narrative gives people a full…

crisis was instigated by consumer demand, oblivious politicians, and the competition against banks, small brokers and lenders. There are three types of mortgages which are the Government (FHA), Conforming (Fannie Mae and Freddie Mac) and the private subprime lenders that are usually funded by larger banks. These lenders have established a practice of buying the loan from the same broker after it was closed down, and its market are the consumers with good or bad credit or unproven income. When…

6. The turnaround post the bankruptcy and suggestions General motors had faced the issue in 2008 because of the downturn in its sale and went on for bankruptcy. Company had made turnaround since then and within five years of huge equity infusion by the US government, company had come out of crisis. In 2009, company was on the verge of being liquidated and was set to be closed. But it made a turnaround by restructuring itself. At that time, there also a fear that no one would like to buy a car…

External Factors and Internal Factors The 2008 great recession had caused several economic downturns to many financial institutions, which forced to go out of business or filed a bankruptcy protection. This financial crisis had caught many economists off-guarded the severity of financial damages that the crisis created. There were numerous factors that caused the financial collapse included the over-heat real estate market, the mortgage-back security products, the loose monetary policy, the…