Federal Home Loan Banks

Financial Crisis in 2008 and if there was one main cause, or a series of unfortunate events that led to the crisis. The crisis began when the market was no longer funding many financial entities. The Federal Reserve then lowered the federal funds rate from 5.25% to almost zero percent in December 2008. The Federal Government realized that this was not enough and decided to bail out Bear Stearns, which inhibited JP Morgan Chase to buy Bear Stearns. Unfortunately Bear Stearns was not the only financial entity

transformed the slightly stodgy, conservative banks of George Bailey 's day to the high-stakes world of Wall Street, where large fortunes could be made with financial innovation. The first step in the chain dates back to 1938, when the Federal National Mortgage Association (Fannie Mae) was

Glossary 14 Table of Charts Federal Funds vs Mortgage Rates 3 USA Home Price Indices 4 USA Property Foreclosures 2007 5 USA subprime Market Share 6 Mortgage Foreclosures Factors..............................................................................................................9

This report reviews a number of factors with the housing market, starting with the rent/price ratio, and covering relevant economic events and factors specific to renting and home ownership. Rent/Price Ratio Data The rent/price ratio data over a fourteen-year span from first quarter 2000 through first quarter 2014 tracks the trends of the housing market leading into the housing crisis that started in 2007 and its rocky path to correction. The start of this period shows a ratio of 4.7 percent

investments, getting a loan or putting a deposit (ABP, 2001). Financial institutions get dealt with on day to day so almost everyone deals with it. Majority of the depositing, borrowing money, exchanging money contains and must be done through financial institutions. The functions in financial system contains: •Investment Banks •Commercial banks •Insurance Companies •Investments companies One of the functions of the financial institutions is Commercial Banks. Commercial banks will accept deposits

The cause of the 2008 financial meltdown was caused by many different things that created the “perfect storm”. Some of these factors include Wall Street greed, individual greed, Barney Frank and home-ownership “promoters”, mortgage brokers, subprime loans, Alan Greenspan and The Fed, credit default swaps, greedy investors, speculators, unethical or incompetent rating agencies, Republicans, Democrats, Congress, and Presidents (Terry 2013). There were numerous things that caused the meltdown and we

more and more loans to higher-risk borrowers, including undocumented immigrants. Lending standards particularly deteriorated in 2004 to 2007. Fannie Mae and Freddie Mac supported the housing industry by providing billions in financing to the mortgage market. Both companies bought safer loans that followed their guidelines.

adjustable rate mortgage or a decreased home value and

system. a) Commercial Banks. More than 10,000 commercial banks exist in the U.S.; all banks must be chartered. Seventy percent of all commercial banks are state banks; most large banks are national banks, chartered by the federal government. -Diversification and Mergers. These result from numerous other investment options that attract investors. -Commercial Interest Rates. Banks can set their own interest rates; the lowest rate allowed is the prime rate. b) Savings and Loan Associations. These institutions

according to Alan Greenspan (former Federal Reserve Chairman), the International Monetary Fund, Warren Buffet, and a host of economists around the world. In the United States, financial and real estate sectors’ unethical behavior has done much to produce the crisis, and must be addressed for prosperity to be reestablished. In the spirit of