Thursday, January 12, 2017

Compare and Contrast Resulting Consequences of Subprime Loans

Home ownership is the dream of every American. The subprime loans helped many people attain this dream albeit for a short time. Subprime loans enabled people to own homes benefiting in the short term. In the long term however, they lost their homes as they could not service their mortgage loan. According to Moore and Brauneis (2008), borrowers benefited from low borrowing costs for over 10 years.
The following graph shows how the subprime loans led to historical high home ownership in the US.

 Annual Home Ownership

The following image captures the causes and consequences of the subprime loans in the US
 Subprime Mortgage Crisis diagram

Moore, M. A., & Brauneis, M. J. (2008, April). U.S. subprime crisis: Risk management’s next steps. Bank Accounting & Finance 21(3), 18-48. Retrieved from

Annual Homeownership  diagram. Retrieved from

Subprime Mortgage Crisis diagram. Retrieved from 

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