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Banks were Giving Loans to Anyone
From 2002 up untill about 2008 banks would give out loans to anyone no matter what. They were not checking the 3 c's of the lender. Many of them ended up not being able to pay the mortgage. -
House+No Money=Foreclosure
Banks were giving subprime mortgages to people who can't afford them. People having houses that they can't afford causes the bank who loaned the money to lose money. Since they cannot pay their mortgage payments the bank has to foreclose the house -
People Become Homeless When Their House is Foreclosed
Now that the bank foreclosed their home they are homeless. Now theres a crisis where the people couldnt pay the bad mortgage they recieved and they are now homeless -
Banks Go Bankrupt
After the banks lose all this money after giving out so many toxic mortgages they go broke. They have to claim bankruptcy, this adds to the crisis because now banks are failing. -
Emergency Economic Stabalization Act
The Emergency Economic Stabalization Act was enacted in Oct. 2008 because the banks were broke and needed to be bailed out. The act was proposed by Henry Paulson -
The Federal Reserve Bailed The Banks Out
The Federal Reserve bailed the bankrupt banks out. So now the banks and government have money and the people are still homeless or poor. -
Government is Making New Laws
To cut down on these toxic mortgages the government is stricter on the laws. They are making these laws to make sure banks give mortgages that people can afford. -
As a Result of this Crisis
As a result of the crisis we are in trillion dollar debt. In the past 10 years we have raised the debt higher than it has ever been. -
Government is Failing to Deal with This Debt
People are struggling now because of the huge debt. The government claims that they are on top of it, but they haven't seemed to even put a dent in this debt. -
Unemployment is Still At an All Time High
Although the economy is slowly improving unemployment is still at an all time high. 7.5% of Americans are unemployed.
