One Response to “how does american consumer, mortgage broker, banks and insurance companies have to do with economic crisis?”
longliveabcdefg on: 20 July 2009 at 8:39 am
Simply place, some banks and mortgage brokers lured some house buyers who don’t have enough money to make a down payment nor the ability to pay the monthly mortgage into buying a house. The mortgages are sold within the financial markets and insurance companies either insure or invest in them. When the housing market crash, home owners who’re not able to pay the mortgage owe more money to the banks than the house is worth and the sold mortgages lost a lot of value. Insurance companies in turn incur a huge loss.
Simply place, some banks and mortgage brokers lured some house buyers who don’t have enough money to make a down payment nor the ability to pay the monthly mortgage into buying a house. The mortgages are sold within the financial markets and insurance companies either insure or invest in them. When the housing market crash, home owners who’re not able to pay the mortgage owe more money to the banks than the house is worth and the sold mortgages lost a lot of value. Insurance companies in turn incur a huge loss.