mortgage crisis

In mid-August of 2007 the mortgage lending industry hit the brick wall of the monetary market’s adjustment to the risk of funding sub-prime loans. The adjustment, which had been widely predicted since March of 2007, was really not an adjustment so much as a cessation of lending. The difficulty for Wall Street was mixing sub-prime with prime loans in portfolios, and therefore not being able to really determine the value of a “package of loans”. That stark reality seemed to hit everyone at the same time, and the reaction was to stop lending. That led to a crises in liquidity in world wide financial markets, and central banks had to step in to “shore up” the monetary market’s so as restore confidence in the system. Following is part of the effect of the “Brick Wall”:

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Written by Larry D. McGee, Denver Realtor - Visit Website Sphere: Related Content