The Subprime Lending Crisis: Causes and Effects of the Mortgage Meltdown, 2008

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Bianco, Katalina M. The Subprime Lending Crisis: Causes and Effects of the Mortgage Meltdown, 2008
This article seeks to establish some of the causes and effects of the mortgage meltdown during the recent financial crisis. The subprime mortgage crisis is considered to be one of the root causes of the financial meltdown. The article indicates that the steep rise in home foreclosure prior to the crisis between 2006 and 2007 is what triggered the financial crisis that was witness within the United States and spread to other economies across the globe. According the reports such as IMF report, the root causes of the financial crisis are housing bubble historical low interest rates and poor regulation of the regulatory bodies. The housing bubble resulted in bubble bursts that triggered the financial crisis in the latter years. There were also other kind of lending that emerged during prior to the crisis. The borrowers and the regulators are also to be blamed for the crisis according to the article.
This article is of significance to the research study conducted. It provides insight into some of the factors that led to the subprime mortgage crisis and how it contributed to the recent financial crisis and economic meltdown.
Gerardi, Kristopher, Harvey S. Rosen and Paul Willen. “Do Households Benefit from the Financial Deregulation and Innovation? The Case of the Mortgage Market.” CEPS Working Paper No.141, 2007 March
This article examines the role that financial deregulation and innovation played in the mortgage market. It looks at some of the financial deregulation measures that were taken in within the mortgage market and how they affected the economy. It is indicated that banking industry and financial markets are the sections of the economy of the United States that have experienced many changes. The changes have effects on the income of the various household. The imperfections in the mortgage market are believed to have affected the income of many household which resulted into negative effects on the financial market and the economy. The article also examines the role of the g...