After the crash of the housing market in 2008, the government created regulations to ensure that...

After the crash of the housing market in 2008, the government created regulations to ensure that purchasers were not abused with predatory lending in buying a home. What is the issue?

Expert Solution

The issue was of Subprime Mortgage crisis which happened between 2007- 2010 and lead to Financial crisis.

It was lead by a huge decrease in Home prices after the collapse of a housing bubble leading to foreclosure and Devaluation of housing securities.

The 2 main causes for this Crisis were the rise in subprime lending and increase in housing investment with high risks.

US houses prices began to fall in 2006 after their peak investors become less interested to invest in mortgage backed securities.

Rahul Sunny answered 2 years ago

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