The Subprime/Foreclosure Crisis

The U.S. economy has been gripped by a relentless housing crisis for almost two years. A key driver in this crisis has been the many subprime mortgages that involved high rates and fees -- often requiring no down payments -- that were made in the past several years. California is ground zero in the subprime crisis and the resultant spillover effects -- foreclosures, bankruptcies, decreasing property values to name a few. Recognizing that relying on the market alone is unlikely to bring an end to the crisis, the U.S. Congress and the Bush Administration are currently debating federal responses. Meanwhile, some states, including California, are undertaking their own initiatives.

Category:

News & Politics

Tags:

• Subprime
• Mortgage
• Crisis
• Policy
• Initiatives
• California

[eyreland]

The audio in this clip is horrible verging on unusable.

[210realtydotcom]

Outlaw adjustable rate mortgages.

[fitzgeraldcscott]

Marketshare ~ '03(billions) ~ Change from '02 RBS Greenwich Capital Markets 11.6% ~ 23.6 ~ 69% Lehman Brothers 11.5% ~ 23.3 ~ 47% Credit Suisse First Boston 9.8% ~ 19.8 ~15% Morgan Stanley Dean Witter ~ 8.8% ~ 17.9 ~63% Banc of America Securities 7.8% ~ 15.9 ~ 14% CitigroupSalomon 7.5% ~ 15.2 ~ 71% Deutsche Bank 7.0% ~ 14.2 ~ 83% Countrywide Securities 6.8% ~ 13.7 ~ 74% UBS Warburg 5.7% ~ 11.6 ~ 160% JP Morgan 4.5% ~ 9.1 ~15% Total for all underwriters 51% ~ 202.9 ~51%

[fitzgeraldcscott]

2002-2006 subprime loans in the surrounding twin cities counties went from 15% to 26%. 2002 George W Bush was president. 2001 invasion of Afghanistan, 2003 invasion of Iraq. March 2002 unemployment was 5.5%. Prime rate charged by banks was 4.67. In 1080 the prime rate was 15.26. The average sales price of a new homes sold in the US was 228,700 compared to 76,400 in 1980. The industry accounted for about $330 billion, or 9%, of U.S. mortgages in 2003, up from $35 billion a decade earlier.

[Anothercoilgun]

Update this to house foreclosure crisis. Thew whole blame it on subprime not only is old but has long been proven a lie.

[dannyt92548]

There are many many more factors that contribute to the mess we're in but you got this right. Ive had a friend of mine ranting about how great the 1% interestst he got so he bought a $750K home 3 years ago. Today it's worth about $450K. he can't refi and hope to sell it for a million in 2 years. It ain't gonna happen. Outlaw ARMs? Why was it even allowed? Greedy Wall street bankers/lenders + desperate unqualified homeowner wanna bees = current crisis.

[ciro9]

"We the People" of moderate income should be granted the right to borrow or refinance a low interest home mortgage loan based on income directly from the Fed which should be nationalized for the working class people of our nation" to end the mortgage slavery in America from the bank's, Fannie Mae, Freddy Mac, FHA etc. "The Change We Need" must come from the Federal government.