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The American subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the 2007–2008 global financial crisis. The crisis led to a severe economic recession , with millions losing their jobs and many businesses going bankrupt .
Government policies and the subprime mortgage crisis covers the United States government policies and its impact on the subprime mortgage crisis of 2007-2009. The U.S. subprime mortgage crisis was a set of events and conditions that led to the 2007–2008 financial crisis and subsequent recession.
Causes of the crisis included predatory lending in the form of subprime mortgages to low-income homebuyers and a resulting housing bubble, excessive risk-taking by global financial institutions, [1] and lack of regulatory oversight, which culminated in a "perfect storm" that triggered the Great Recession, which lasted from late 2007 to mid-2009.
The credit crisis resulting from the bursting of the housing bubble is an important cause of the Great Recession in the United States. [ 5 ] Increased foreclosure rates in 2006–2007 among U.S. homeowners led to a crisis in August 2008 for the subprime , Alt-A , collateralized debt obligation (CDO), mortgage , credit , hedge fund , and foreign ...
The proximate cause of the crisis was the turn of the housing cycle in the United States and the associated rise in delinquencies on subprime mortgages, which imposed substantial losses on many financial institutions and shook investor confidence in credit markets.
The book analyses the causes of the subprime mortgage crisis in the United States in an attempt to assign responsibility for the collapse of a number of mortgage companies in 2007-2008 and for the sharp rise in mortgage defaults in the wake of the sudden tightening of mortgage credit in the summer and early fall of 2007.
It concluded that "the crisis was avoidable and was caused by: Widespread failures in financial regulation, including the Federal Reserve’s failure to stem the tide of toxic mortgages; Dramatic breakdowns in corporate governance including too many financial firms acting recklessly and taking on too much risk; An explosive mix of excessive ...
The government interventions during the subprime mortgage crisis were a response to the 2007–2009 subprime mortgage crisis and resulted in a variety of government bailouts that were implemented to stabilize the financial system during late 2007 and early 2008.