Mortgage Crisis

MORTGAGE CRISIS 1

Angelina Wilborn

FI 425

Martin Harrison

March 5, 2015

MORTGAGE CRISIS 2

ABSTRACT

There is a heated debate surrounding who should be held liable for the subprime mortgage crisis.

This hosing crisis submarined the U.S. economy into a tremendous recession. This recession left

thousands of Americans without homes and pensions. The question some Americans want to

know is responsible? As noted by Byun (2010), some researchers have proposed that banking

institutions, brokers, investors, governmental regulators, politicians, mortgage lenders, borrowers

and Wall Street all share some accountability for the economic meltdown. The unfortunate

reality is that no one wants to take responsibility for this crisis. Is the government at fault for

their negligence for not protecting victims of predatory lending? Should Americans fault

mortgage brokers who sold loans to unqualified borrowers in order to collect a larger

commission, or should Americans blame homebuyers, who accepted loan terms knowing that

they would not be able to fulfill their long-term obligations? Ultimately, the responsibility of

for the collapse is a collective effort of numerous parties.

MORTGAGE CRISIS 3

The Subprime Mortgage Crisis, Who Really is to Blame

Within the last decade and prior to the subprime mortgage crisis, mortgage lending had

advanced tremendously from brick and mortar institutions, where borrowers had face

to face interaction with their lenders, to web based retail lending accessibility. The primary

reason for the new transition was the massive increase in mortgage...