Mortgage Debt Relief . Specify and explain the arguments pro and con for reducing mortgage debt during and after the 2007-2009 Great Recession.
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Mortgage Debt Relief .
Specify and explain the arguments pro and con for reducing mortgage debt during and after the 2007-2009 Great Recession.
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- Define the following terms and explain why they were important during the housing and credit crisis of 2007-2009 a.Securitization b. Subprime loan c. Asset write-downDiscuss how the subprime mortgage crisis of 2007 was based upon the flawed financial model that house prices only increase.Why did actual home buyers/ borrowers start defaulting in the financial crisis of 2007/2008?
- Briefly explain mortgage securitization and how it contributed to the economic crisis.How did a decline in housing prices help trigger the subprime financial crisis that began in 2007? Explain.Discuss the pros and cons of a 30 year, fixed rate loan. In addition, should Congress and state legislatures more closely monitor and regulate the mortgage industry in light of the mortgage collapse? Has the mortgage industry recovered enough to not require further government oversight?
- A. What is the subprime mortgage market? B. What important role did these subprime mortgages play in the 2008 Financial Crisis?During the 2008 recession, large financial institutions including investment and insurance companies, were at risk of bankruptcy due to the sub-prime mortgage crisis. Which element of insurance risk best demonstrates this concept? A. the loss produced by the risk must be definite B. the loss produced by the risk must be measurable C. the loss must not be catastrophic D. the loss must be fortuitous or accidentalIn the previous chapter, significant problems about the ability of borrowers to meet mortgage payments and the evolution of fixed interest rate mortgages with various payment patterns were discussed. Why didn’t this evolution address problems faced by lenders? What have lenders done in recent years to overcome these problems?
- Banks and other lenders are required to disclose a rate called the APR. What is this rate?Why did Congress require that it be disclosed? Is it the same as the effective annual rate? Ifyou were comparing the costs of loans from different lenders, could you use their APRs todetermine the loan with the lowest effective interest rate? Explain.Do you think that IFRS 9 may make loans more expensive for borrowers? Implementation of IFRS 9 will influence borrower make less loan? Is there any needs of improvement with the relationship between borrowers and financial companies?Which of the following was NOT a direct and major consequence of the 2007-2009 U.S. Subprime Financial Crisis? Group of answer choices a. Small consumer and household savers lost all their money they had in savings accounts due to the failure of many smaller FDIC member banks b. Many people lost their homes when they could no longer make their payments after their subprime mortgage rates reset to a much higher rate after two years c. Lehman suffered a major financial collapse and ultimately was dissolved after many of its remaining parts were purchased by Barclays and Nomura, among others d. The U.S. stock markets dropped dramatically as the credit fueled economy of the mid-2000s started to suffer after the credit bubble began to burst.
