So here I’d like to explain Mortgage Crisis a bit. The subprime mortgage crisis is an ongoing economic problem due to greedy lending from mortgage companies and investment banks as well as risky borrowing from homebuyers. At first mortgage companies found potential profits in housing market. As a result, they wrapped the risky plan up with a sugar coat and persuaded middle-class people to borrow mortgages. And when the housing price went down, the sugar coat melted both buyers and lenders suffered. Because the housing price plummeted, borrowers couldn’t afford to pay back the mortgage, at the mean time, lenders such as Fannie Mae and Freddie Mac couldn’t get the money back and had no choice but to issue bankruptcy.
The subprime mortgage crisis is no way to be a small deal because we see real people suffering from the economic crash. For example, a 34-year old mom with two kids is striving to pay back a $20,000 debt. She opened a blog to share with others her experience in paying the debt. There is another report stating that nearly two million children will be psychologically affected by foreclosure due to mortgage crisis. People are struggling to cover the medical expenses, college expenses and other basic needs. And now they lost their homes—the one and only source of secure and happiness.
We can’t say those people are foolhardy because they put their money into a risky investment. They are normal people as we do, who believe government will never make bad decisions, and believe they might take advantage of the properties and give their families a better life. And now, as things turn out, they not only lost their home, but also hope. This is not only the problem of Wall Street. We should give more attention to our neighbors on Main Street.
What’s your reason for wake up in the morning?
6 years ago
4 comments:
This is such a refreshing perspective. I had never read of the psychological effects the bailout was going to have on people anywhere else... and it's definitely an important thing to talk about.
Yeah this definitely does not need to be a quick fix! The last thing we need as a nation is to slip even further into a recession than what we are in right now. I am interested to see what your analysis is going to be like. I don't know too much about the whole mortgage situation so i will look to your blog for knowledge.
To petra and r.c.,
It is really serious problem. Those who lost their homes in early ages tend to feel insecure in later years. And now one in six house is undergoing foreclosure. Government will have to deal with this before this is too late.
Thanks for your comment, o bro. As the whole economic thing in progression, it is for sure that there's a lot to be talked about. We need to look back and fix this from the root, not only surface. A quick fix will only worsen the situation.
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