Another Subprime Mortgage Crisis? It Could Happen

iStock

Another Subprime Mortgage Crisis? It Could Happen

Mar, 26th 2017

The Federal Reserve bailed out Bear Stearns on March 14, nine years ago. What has the Fed learned from that mistake? Not enough, perhaps.

A little understood part of the Bear story is that in March 2008, the Federal Open Market Committee, or FOMC, ignored critical facts concerning Fannie Mae and Freddie Mac. Unfortunately, the Fed may be making the exact same mistake today.

Bear's problems came from excessive investment in bonds based on subprime mortgages, which carry greater risk for one or more reasons, such as the borrower's poor credit rating. Fannie and Freddie were the principal housing lenders, having been organized as "Government Sponsored Enterprises" or "GSEs," and they were responsible for the creation of much of the subprime mortgages.


Read More

Join Us. We are waiting for you!

Sign Up Today!

We welcome you to our community where you can gather and share information on debts and issues which may have your life unsettled. Together we thrive!


Logo mobile 4b2fda9e088d7249be95ede0cc3adea2de299a346ba55b450264e0c976b239c5

Join our community Today! IT'S FREE

Our Interactive Knowledge Base Has All The Infomation You Need To Settle Your Debt & Settle Your Life™

SIGN UP NOW!

Join, Resolve & Share!