How did subprime loans lead to the current recession?
iLoveLifeć asked:
I’m doing a paper for my business class and have to explain how the subprime loans led to the current economic recession. Thanks!
I’m doing a paper for my business class and have to explain how the subprime loans led to the current economic recession. Thanks!
Tags: Lead, Led, Subprime Loans
November 27th, 2009 at 10:53 am
Sub-prime loans were created because Congress wanted more Americans to become homeowners. To do this they forced the large lenders to relax lending standards and create lending programs so that more people could qualify for mortgages. When the borrowers couldn’t pay the mortgage, the foreclosure numbers started to rise. Then Congress said, “you nasty greedy lenders, you took advantage of these people”. Congress created the sub-prime housing bubble, and when it burst, we all felt the shock wave.