A few years ago mortgage lenders greatly loosened their lending standards. It eventually got to the point where even people with bad credit were able to buy houses with no money down. Many of those loans were structured so that for the first few years the payments would be low, then eventually increase.
As those increases have begun to kick in, people have found themselves unable to keep up. As they began defaulting, the sudden increase in bad loans began to drag lenders under. Several have, in fact, failed entirely because of those bad loans.
The situation has now gotten to the point where the crisis is no longer just affecting the housing market, but spreading to the economy as a whole. Over the last few days even the stock market began to suffer as this mess reached crisis proportions.
So how was a total financial meltdown finally averted? FOREIGN banks stepped in yesterday and put up a total of $323 billion to shore up America's banking system.
WOW!!! If that's not embarrassing, I don't know what is. Well, aside from vowing to "go it alone" in Iraq, then blaming the rest of the world for the mess we made because they don't want to get involved.
As those increases have begun to kick in, people have found themselves unable to keep up. As they began defaulting, the sudden increase in bad loans began to drag lenders under. Several have, in fact, failed entirely because of those bad loans.
The situation has now gotten to the point where the crisis is no longer just affecting the housing market, but spreading to the economy as a whole. Over the last few days even the stock market began to suffer as this mess reached crisis proportions.
So how was a total financial meltdown finally averted? FOREIGN banks stepped in yesterday and put up a total of $323 billion to shore up America's banking system.
WOW!!! If that's not embarrassing, I don't know what is. Well, aside from vowing to "go it alone" in Iraq, then blaming the rest of the world for the mess we made because they don't want to get involved.
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