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Mortgage Crisis

by Brianna - June 13th, 2013.
Filed under: News. Tagged as: , , , .

At present and for a long time one of the major economic and financial activities carried out is the granting of loans mortgage, since this suggests both benefits for both parties, achieving that prompted by purchasing your home and who gives such loan will receive a payout, given mainly by the interests and the time that passes this relationship between creditor and debtor; However this form of loans years ago came showing certain failures, up to the point that in the year of 2007 the decadent situation of mortgages burst, becoming what is known as the mortgage crisis of 2007, stage in which mortgages ceased to be as profitable for the both parties, what genre a great crisis in this type of market. The mortgage crisis of 2007 is also known as the credit crisis or sub-prime crisis, where a big problem occurs mainly in the financial field, since I not only mean a major difficulty for the mortgage market, but it was extended by a good part of the total of the financial market.

The moment in which started to talk about the mortgage crisis of 2007, is given as of August 9, 2007, although it must be clear that demonstrations were already coming from long ago; What is added to this mortgage crisis of 2007 is looking more impetus to the economic crisis of 2008 and it also makes part of it, i.e. an extension of the crisis has kept which not only is has could not find a solution useful, but it came out a field only mortgages to spread over much of the economy. It can be said that the main cause that would step to the appearance of the 2007 foreclosure crisis, is due to the sub-prime or also known as you sub-prime, which are used in United States of America, which supposes a few great risks for the mortgage loan, which is aimed at the people who performed with more low-income and that by the cost of the houses they would hardly get one; so the mortgage crisis of 2007 occurred as the result of a special mortgage, which gives preference to customers with low solvency and that when it comes to the truth could not adequately handle the load of the periodic payments. The biggest problem that led these mortgage sub-prime, is that these could be removed from the liabilities of banks, turning to mutual funds and investors are unaware of the true assumed value and when signs of alarm in terms of non-payment, were began to give speculation about the real estate situation, which genre a credit crunch and a great volatility in the securitiesresulting in distrust and panic of investors, which would affect the bag around the world due to the lack of liquidity.

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