http://topics.nytimes.com/topics/reference/timestopics/subjects/c/credit_crisis/
This article says that banks and lenders were giving loans to people in the lower to middle class who couldn't pay it off and then had to file for bankruptcy. The government had to take over banks and lending companies and there was a 700 billion dollar bailout on lending companies.
This all started when the stock market began o fall in the late 1900's and the banks were letting people get loans to easy the prices of houses were going up and people we refinancing easily. The lending was going out faster then coming in and they were not receiving money they were losing money.
The rising number of foreclosures was rapidly increasing as well the cost of houses was decreasing. The banks were loosing money every time someone foreclosed.
This is happening at a rapid rate now and lending companies are being more strict and looking into your credit more before giving you a loan. They lost tons of money and I believe that this is going to end in 5 years and never happen again.
I agree. The banks gave out loans that the home buyers could simply not afford, and when they declared bankruptcy or had to foreclose on the home, the economy began to dissolve, and began the path to this recession.
ReplyDelete