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Among the important catalysts of the subprime crisis were the influx of money from the private sector, the banks entering into the mortgage bond market, government policies aimed at expanding homeownership, speculation by many home buyers, and the predatory lending practices of the mortgage lenders, specifically the adjustable-rate mortgage, 2 ...
e. A mortgage-backed security (MBS) is a type of asset-backed security (an "instrument") which is secured by a mortgage or collection of mortgages. The mortgages are aggregated and sold to a group of individuals (a government agency or investment bank) that securitizes, or packages, the loans together into a security that investors can buy.
Precursor, "Subprime I". Although most references to the Subprime Mortgage Crisis refer to events and conditions that led to the 2007–2008 financial crisis and the Great Recession, a much smaller bubble and collapse occurred in the mid- to late-1990s, sometimes dubbed "Subprime I" [3] or "Subprime 1.0". [4]
Subprime mortgages — also known as non-prime mortgages — are for borrowers with lower credit scores, typically below 600, that prevent them from being approved for conventional loans ...
t. e. Government policies and the subprime mortgage crisis covers the United States government policies and its impact on the subprime mortgage crisis of 2007-2009. The U.S. subprime mortgage crisis was a set of events and conditions that led to the 2007–2008 financial crisis and subsequent recession. It was characterized by a rise in ...
e. Credit rating agencies and the subprime crisis is the impact of credit rating agencies (CRAs) in the American subprime mortgage crisis of 2007–2008 that led to the financial crisis of 2007–2008. Credit rating agencies, firms which rate debt instruments / securities according to the debtor's ability to pay lenders back, played a ...
The United States Housing and Economic Recovery Act of 2008 (commonly referred to as HERA) was designed primarily to address the subprime mortgage crisis.It authorized the Federal Housing Administration to guarantee up to $300 billion in new 30-year fixed rate mortgages for subprime borrowers if lenders wrote down principal loan balances to 90 percent of current appraisal value.
Bond insurance. Bond insurance, also known as " financial guaranty insurance ", is a type of insurance whereby an insurance company guarantees scheduled payments of interest and principal on a bond or other security in the event of a payment default by the issuer of the bond or security. It is a form of "credit enhancement" that generally ...