How defaults on risky mortgages wreaked havoc around the world.
From 2001 through mid-2006, single-family home prices surged 84%, according to the S&P/Case Shiller U.S. National Home Price Index. Lenders granted mortgagees with risky structures to poor-credit or “subprime” borrowers, thinking rising home values would offset the risks. Homebuilders built new homes at a record rate. Home loans were resold and packaged into mortgage-backed securities, which were brought by hedge funds and other investors. This generated capital for lenders to make more loans. Then, the housing boom ended.
Michael J. Martinez, Kristen Girard
Jonah's Thoughts:
“This is a great summary if what happened to our credit markets.”
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment