7 Questions
What led to lax lending standards in the US housing market in the 2000s?
Demand for mortgage-backed securities (MBS)
What type of loans were commonly given to people with low income and bad credit during the housing bubble?
Subprime loans with high risk levels
What was a common predatory lending practice during the 2000s housing market boom?
Utilizing adjustable-rate mortgages with low initial payments
What effect did the bursting of the housing bubble have on house prices?
Resulted in a significant drop in house prices
What was the main reason behind creating the Troubled Asset Relief Program (TARP) by the government?
To stabilize the financial system during the crisis
What did the Dodd-Frank financial reform bill aim to achieve following the 2008 crisis?
Enhance transparency and reduce risk-taking by banks
How did investors mostly contribute to the housing bubble according to the text?
By buying mortgage-backed securities instead of individual loans
Learn about the 2008 financial crisis in the US and the government's response to it. Explore how investors shifted towards low-risk, high-yield investments in the US housing market, leading to the creation of mortgage-backed securities (MBS).
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