Impact Of The Financial Crisis On America

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CDO impact of the Financial crisis Since 2003, there are economists warned America 's real estate bubble will burst a year, although this prediction has not fulfilled,however, the occurrence of happen sooner or later. In 2007 August,America sub-prime mortgage crisis broke out suddenly, not only the real estate bubble has finally burst, America also fell into the since twentieth Century 30 the Great Depression of the most serious financial crisis. From the short term, American economy is dynamic. But a large number of " financial wealth " in fact it created just paper wealth, or even just computer some of the symbols, the deep structural problems American, through dollar issuance, all kinds of derivative instruments issued by financial…show more content…
(2) the 2/28 adjustable rate mortgage ( Adjustable Rate Mortgage,ARM ). Such mortgages began to implement a fixed interest rate,after a period of transition to floating interest rates. If property buyers borrowing 30 years of 2/28 adjustable rate loans, in the first two years at a low fixed rate interest payments, from the beginning of the third year, the interest rate will be reset (Reset ), takes the form of a kind of index and the last of the risk premium. In general, even if the market interest rates during this period did not change, from the beginning of third years of the mortgage interest rate will be improved significantly. (3) selectively adjustable rate mortgage ( Option ARM ). Such mortgages allow borrowers to choose payment structure, can not only from the beginning of amortization of principal and interest, may also pay interest only and amortization of principal and interest, you can also pay a minimum monthly payment: payment is usually lower than the minimum monthly pay only the interest, but the shortfall will be automatically included in the loan principal, this approach is called negative amortization ( Negative Amortization ). In this case, the borrower shall repay the principal amount eventually to exceed the original loan amount. (4) no down payment mortgages. This mortgage allows borrowers
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