PHI 2397 Lecture 8: PHI2397-Course8
9 Jun 2017
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Some developments in the extended crisis (select details from above) (don"t need to know all of them by heart) Feb 2007: the us federal home loan mortgage corporation (freddie mac) stops buying risky subprime mortgages and mortgage-related securities. April 2007: new century financial corporation, a lending subprime mortgage lender bankrupt. A lot of major private financial institutions to lend money to the ones who couldn"t really afford it . Lending money to people who weren"t really creditworthy. They didn"t really do back checks like what is their employment, their revenues, their credit situation. They would give a low interest rate at the beginning but then rate would escalate afterwards. People weren"t expecting that huge jump and were getting buried in interest after interest. Aug 2007: bnp paribas, france"s largest bank stops redemption on investment funds. Sep 2007: bank of england, $ supports northern rock, the united kingdom"s fifth- largest mortgage lender.
