The Great Recession Research Paper

The mortgage crisis of 2007 marked catastrophe for millions of homeowners who suffered from foreclosure and short sales. Most of the problems involving the foreclosing of families’ homes could boil down to risky borrowing and lending. Lenders were pushed to ensure families would be eligible for a loan, when in previous years the same families would have been deemed too high-risk to obtain any kind of loan. With the increase in high-risk families obtaining loans, there was a huge increase in home buyers and subsequently a rapid increase in home prices. As a result, prices peaked and then began falling just as fast as they rose. Soon after families began to default on their mortgages forcing them either into foreclosure or short sales. Who was to blame for the risky lending and borrowing that caused the mortgage meltdown? Many might blame the company Fannie Mae and Freddie Mac, but in reality the entire system of buying and selling and free market failed home owners and the housing economy.

Does being American mean that you’re an American citizen, or does it mean that you have the same rights and decisions as someone who is a successful American citizen? These decisions include choices you make in order to better yourself in life, whether it has to do with your choice in career, or what you want to do in life. Making decisions, and having choices comes with freedom, as a person, and that reflects on being an American everywhere in the world, even though you’ve never been in America. To be an American means that you have the freedom, and rights to do what you want, be who you are, and be/ become who you want. This right of having the freedom to do what you want, can be elaborated by someone’s life chances.

When the Great Recession is spoken about it us usually linked to the Great Depression because it had a similar economical effect on the nation. The unemployment went down, there was poverty, family had little or no resources left and lastly it was hard to recover from it.

During the early 2000 's, the United States housing market experienced growth at an unprecedented rate, leading to historical highs in home ownership. This surge in home buying was the result of multiple illusory financial circumstances which reduced the apparent risk of both lending and receiving loans. However, in 2007, when the upward trend in home values could no longer continue and began to reverse itself, homeowners found themselves owing more than the value of their properties, a trend which lent itself to increased defaults and foreclosures, further reducing the value of homes in a vicious, self-perpetuating cycle. The 2008 crash of the near-$7-billion housing industry dragged down the entire U.S. economy, and by extension, the global economy, with it, therefore having a large part in triggering the global recession of 2008-2012.

The housing crisis of the late 2000s rocked the economy and changed the landscape of the real estate business for years to come. Decades of people purchasing houses unfordable houses and properties with lenient loans policies led to a collective housing bubble. When the banking system faltered and the economy wilted, interest rates were raised, mortgages increased, and people lost their jobs amidst the chaos. This all culminated in tens of thousands of American losing their houses to foreclosures and short sales, as they could no longer afford the mortgage payments on their homes. The United States entered a recession and homeownership no longer appeared to be a feasible goal as many questioned whether the country could continue to support a middle-class. Former home owners became renters and in some cases homeless as the American Dream was delayed with no foreseeable return. While the future of the economy looked bleak, conditions gradually improved. American citizens regained their jobs, the United States government bailed out the banking industry, and regulations were put in place to deter such events as the mortgage crash from ever taking place again. The path to homeowner ship has been forever altered, as loans in general are now more difficult to acquire and can be accompanied by a substantial down payment.

In 2008 the real estate market crashed because of the Graham-Leach-Bliley Act and Commodities Futures Modernization Act, which led to shady mortgage lending or “liar loans” (Hartman). The loans primarily approved for lower income and middle class borrowers with little income or no job income verification, which lead to many buyers purchasing homes they could not afford because everyone wants a piece of the American dream; homeownership. Because of “reckless lending to lower- and middle-income borrowers who could not afford to repay their loans many of the home buyers lost everything when the market collapsed” (Tankersley 3). Homeowners often continued to live in their houses for months or years without paying any

The American Dream is something that should be for anyone who wants to achieve success, and prosperity through the hard work and determination. According to Webster Dictionary, immigration is the act of moving to another country which is not their native to live there permanently. Many people from all over the world are suffering from hunger, having a polluted country and suffering poverty before you want to be selfish think about all those people who wish to have one fourth of what we all have in America and to be part of the El Dorado where people do not suffer a lot as other countries. Several people from all over the world specially form third world countries that are in war try so hard to complete the Odyssey to the United States for a better life where their dreams can come true. Immigrants who make it to the United States face many discriminations which makes their life harder and difficult. Now those immigrants, how many call them are teachers, doctors, dentists, engineers, and many more occupations and their contributions have a great impact in United Sates. Not only does Mexicans try to come to America to complete their dream come for example also Canadians, Syrians, Cubans and Indians as many other more. Every year more and more immigrants are coming in to United States. The immigrants who crosses the boarder with the hope for a better life have come to be successful at achieving their American Dream and the United States is rapidly increasing their population due

In the lead up to the current recession, when the real estate market began to fall, there were so many investors shorting stocks and securitized mortgage packages that were already falling, that the market simply fell further. There were no buyers at the bottom, and the professional investors made millions off of the losses of others. Beyond this, there was no real federal regulation for securitized mortgages, since there was no real way to gauge the mathematical risk of any given package. This allowed the investors to take advantage of the system and to short loans on real people’s homes. Once these securities were worthless, many of the homebuyer’s defaulted on their mortgages and were left penniless. No matter from which angle this crisis is looked at, the blame rests squarely with the managers who began the entire cycle, the ones who pursued the securitization of mortgages. Their incompetence not only led to the losses of Americans who have never invested in the stock market, but to losses for their shareholders.

The American Dream: Is it fact or fiction? In the United States’ Declaration of Independence, the founding fathers set forth the idea of an American Dream by providing the American people with the recognizable phrase “Life, Liberty, and the pursuit of Happiness” (USHistory.org). The green light at the end of Daisy Buchanan’s dock symbolizes Jay Gatsby’s “pursuit of Happiness” in the novel, The Great Gatsby, set in the 1920s on Long Island, New York (Fitzgerald, F. Scott). The American Dream is defined as “the belief that anyone, regardless of where they were born or what class they were born into, can attain their own version of success in a society where upward mobility is possible for everyone. The American Dream is achieved through

The financial crisis emerged because of an excessive deregulation of business operation of financial institutions and of abusing the securitization mechanism in the absence of clearly defined rules to regulate this area in the American mortgage market (Krstić, Jemović, & Radojičić, 2013). Deregulation gives larger banks the opportunity to loosen underwriting lender guidelines and generate increase opportunity for homeownership (Kroszner & Strahan, 2013). After deregulation, banks utilized many versions of mortgage loans. Mortgage loans such as subprime and Alternative-A paper loans became available for borrowers challenged to find mortgage lenders before deregulation (Elbarouki, 2016; Palmer, 2015). The housing market has been severely affected by fluctuating interest rates and the requirement of large down payment (Follain, & Giertz, 2013). The subprime lending crisis has taken a toll on the nation’s economy since 2007. Individuals who lacked sufficient credit ratings or down payments resorted to subprime mortgages to finance their homes Defaults on subprime and other mortgages precipitated the foreclosure crisis, which contributed to the recent recession and national financial crisis (Odetunde, 2015). Subprime mortgages were appropriate for borrowers with substandard credit and Alternate-A paper loans were

Americans are people who are citizens of the United States of America. As Americans, they have the freedom of speech, the freedom of religion, the right to vote, the right to bear arms, the right to a fair trial and the freedom to life, liberty and the pursuit of happiness. America is a country made by immigrants and almost all of them come with what they call their own American Dream. Throughout the United States, people believed in the American Dream, which is the idea that every citizen has equal opportunity to be successful and prosper through hard work. In the 1800’s and the early 1900’s, not everyone had the opportunity to pursue their American Dream because minorities were subjected to racism and discrimination from white people for being inferior and insignificant. Women also did not have the same rights as men and were denied their American Dream. Sherman Alexie’s “Indian Education”, Sojourner Truth’s “Ain’t I a Woman?” speech and Langston Hughes’ poem, “I, Too” each show examples of discrimination and segregation and because of this, they each have their own views of the American Dream.

An economic recession occurs when the economy is suffering, and unemployment is on a rise. A drop in the stock market and a decrease in the housing market will also affect the economy due to a recession. Higher interest rates affect the economy constrain liquidly or the cash available to invest in stocks and businesses. Inflation alludes to the rise in prices of goods and services which also puts a strain on the economy further adding to a recession. Businesses were lost and consumer spending dwindled the only category that remained safe was healthcare. The economic meaning of a recession is a decline in the Gross Domestic Product (GDP) consisting of two consecutive quarters on a decline. If the economy is bad consumers are less likely to spend money on goods and service. The effects of a declining economy forced the government to create monetary

The American Dream is a concept that has been wielded in American Literature since its beginnings. The ‘American Dream’ ideal follows the life of an ordinary man wanting to achieve life, liberty, and the pursuit of happiness. The original goal of the American dream was to pursue freedom and a greater good, but throughout time the goals have shifted to accumulating wealth and high social status. Deplorable moral and social values have evolved from a materialistic pursuit of happiness. In “Advertising the American Dream: Making Way for Modernity”, Roland Marchand describes a man that he believed to be the prime example of a 1920’s man. Marchand writes, “Not only did he flourish in the fast-paced, modern urban milieu of skyscrapers, taxi

The American Dream is the idea of the United States having an endless opportunity for anyone, regardless of their past, race, beliefs, and their economic life now. In the novel Of Mice and Men written by John Steinbeck, each character was driven to something that they enjoyed or wanted; something they had to work hard for and strive to have it. In the book, many of these objectives were connected to achieve The American Dream. Lennie and George's American Dream is to pursue their ideal life by owning their own ranch, Candy’s dream is to help Lennie and George buy their ranch and become apart of their little group, and Curley’s wife was dedicated to become an actress and live the “big life” in Hollywood. In conclusion, Lennie and George

Due to such events as the subprime mortgage crisis, the auto market and Wall Street’s failure, the United States suffered a severe economic blow. Looking at the situation from an economic view, supply is supposed to equal demand. Due to the mortgage crisis and the careless attempts of some to make money, there is a superfluous amount of empty homes throughout the United States. In the subprime mortgage crisis, the nature of the failure was the inability to account for money given to individuals, who lack the appropriate requirements. In order to obtain a loan, collateral is needed. References were not being checked and poor credit history went ignored. People were obtaining loans and not paying attention to the interests rates associated. “This time around, the slack standards allowed millions of high-risk borrowers to get easy home mortgages. When this so-called subprime market collapsed beginning about a year ago, ordinary working people bore the brunt” (Gallagher, 2008). Companies were so anxious to place people in homes, that it cost them billions of dollars and