US Subprime Mortgage Market (B): Crisis and its Aftermath
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Code : ECC0029
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Region : US |
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Introduction: The US subprime mortgage financial crisis in 2007 is linked to a steep rise in home foreclosures that began in 2006 which, within a year, developed into a global financial crisis. The US housing market showed signs of decline by the end of 2006. In addition, US' $2 trillion residential mortgage industry has seen an increase in interest rates and decline in new origination volumes. Foreclosure rates on existing mortgages, which were made in 2005 and 2006, went up because these mortgage loans were to enter the floating phase – when interest rates would be hiked. This increase in subprime foreclosures has set off a huge storm, affecting the whole set of participants in the US subprime mortgage market. |
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