It all started by and by September 11, 2001 when faced with a grieving country and a receding economy, Alan Greenspan, the chairman of the Federal Reserve, impoverishedered the national send away rate to almost nothing. He thought that this would motivate Americans of all kinds to go out and buy houses, cars, and other consumer safes. He also lowered the national nest egg rate, with the mindset to stimulate a falling economy. This resulted in more money circulating in the economy, and less collecting dust in private savings accounts. From 2001 to 2005, Greenspans plan worked like a charm on the outside, but was being corrupted by big business. The toll for a impart was so cheap, that the average American with respectable credit walked into a financial institution and was approved inside minutes. This was fine for prime loans (the lender knows that the candidate has a good chance of paying their mortgage), but when the lenders approved Joe Shmo with indescribable credit this became a problem; this is known as a sub-prime loan.
A sub-prime loan is when banks are cognoscente that the customer has a low chance of paying them back but still loan them money anyways. So when these sub-prime cases off-key sour and the customer turned out not to pay his mortgage, the banks foreclosed on the house. We also progress to flippers to blame for this mess. Since loans were dirt cheap, Americans were taking out loans to buy second or even 3rd homes. They had entrepreneurial mindsets and came up with the belief of buying a home, renovating it, and reselling it within weeks. Since houses were selling like hotcakes, this take hold of rich quick ploy worked for a few long time until the pop of the housing bubble. Houses were no longer selling and...If you command to get a full essay, order it on our website: Ordercustompaper.com
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