We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Premium+

The housing crisis in the U.S - Coursework Example

Comments (0)
Summary
The current economic malaise in US constitutes an intertwined cobweb of factors hat have triggered a downturn in various economic dimensions and dynamics, on national and international scales. The crisis can be blamed on various factors characterizing the last 20 years period. …
Download full paper
GRAB THE BEST PAPER
The housing crisis in the U.S
Read TextPreview

Extract of sample
The housing crisis in the U.S

Download file to see previous pages... The current economic malaise in US constitutes an intertwined cobweb of factors hat have triggered a downturn in various economic dimensions and dynamics, on national and international scales. The crisis can be blamed on various factors characterizing the last 20 years period. The medium to short term triggers of the crisis can be traced back to 2005 when house prices surged and started dropping in late 2006.The crisis has burst the housing bubble which has even aggravated the current economic situation in the US which according to economists is already tantamount to a recession. The peak of the crisis heightened particularly remarkably in August 2008 with the U.S treasury declaring the collapsing housing financial system as the highly significant threat to the US economy.The raised foreclosure rates in the 2006-2007 period by US homeowners has resulted in a sub prime, mortgage, hedge and various fiscus dimensions even beyond the housing loaning systems. Many economic analyses have been misguided in their attempt to break down and unravel the cobweb of factors leading to the build up of the economic and housing crisis held as most phenomenal after the great Depression in the 1970s in the US. Many analysts have attributed the collapse of the global financial system to the destabilisation of the mortgage and housing crisis.

Salient provenances of the housing crisis which is inalienable from the economic crisis enlists in its core the lack of feasible and clairvoyant regulatory framework for the moderation and stabilisation as well as sustenance of the financial institutions in the US. The ramifications and ripples of the US economic crisis have swept across global landscapes owing to the long criticized financial system devised after the World wars in which the US economy is the heartbeat of global economic paradigm leaving the entire world susceptible to upheavals rocking the US economy.




Root causes

Steve Latter (2008) has listed the following as the top six causes of the financial crisis in their perceived order of significance. Although the first three are not directly related to the mortgage and housing paradigms the exploration of the housing or mortgage crisis in the US and in the state of Virginia particularly can not be intact without the streamlining of all variables of the multifaceted problem into perspective.
1. Indefinite and inaccurate regulatory edict which permitted financial firms to move to too high ratios of mortgage-backed securities to collateral debt.
2. The lack of substantial focuses on the banking and financial firms' ratio of assets to debt by banking and financial services company regulators.
3. New accounting regulations crafted Sarbanes Oxley (regulation passed after Enron) were too traditionalist resultantly leading to the undervaluation of assets like mortgage- securities. This in turn caused bank debtors to leverage on the bank.
4. Private companies and their leadership made lending decisions out of greed whilst also flouting money lending standards. This was done in the aims of pulling more interest returns by lending to clients who were in Latter's terms "very risky bets".
5. Consumers borrowed what was more that they could afford. The blame on this aspect can be applied on both the borrowers and the lenders although lenders are overly expected to be firm to principle and economic logic when making lending decisions.
6. Miscalculated financial law promulgations which for instance compelled financial institutions like Fannie Mae to avail more loans to lower income clients which amounted high risk money lending.
The unraveling US housing financial system has seen the filing for bankruptcy by various mortgage firms like American Home Mortgage (AHM) which is ranked as the US 10th biggest home loan firm. ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
The Global Financial Crisis has as its basis a failure of regulation. A Critical Discussion
The last quarter of 2008 witnessed market failure as well as a regulation failure. Thus it is expected that the global financial crisis will encourage the authorities to strengthen the regulation regime and make new regulations as well.The Global financial Crisis first began in USA’s sub-prime mortgage market.
19 Pages(4750 words)Coursework
Global Financial Crisis
In the paper, the regulatory failures that especially the western industrialised countries faced and which led to the universal economic crisis in the year 2008-09, is examined along with the findings about the causes or roots of the arising financial crisis along with certain immediate tasks that should be followed in order to cope up with the financial crisis has also been discussed.
8 Pages(2000 words)Coursework
Housing Finance and Economics Evaluating New Labours Housing Policy
This paper primarily focuses on the evaluation of the efficiency of the alteration of the housing policies of the new coalition administration in the UK, which came to power in 2010. The idea behind social housing refers to a system of housing which is affordable. This permits people to on low rents and with security.
11 Pages(2750 words)Coursework
Housing crisis
The housing market collapse worsened the already existing financial crisis of 2008 in the United States. The housing bubble emerged from the relaxation of standards of mortgage loans. This allowed the majority of families to buy homes they could not afford with loans that were subsequently defaulted.
3 Pages(750 words)Essay
U.S. housing price
U.S. housing price The financial crisis of the United States happened at the backdrop of the US mortgage housing bubble. The homeownership drastically declined for the people belonging to the mainstream workforce. A reduction in the incomes of the individuals and an increase in the rate of poverty were noticed in the country.
8 Pages(2000 words)Term Paper
Asian Financial Crisis 1997
Findings 33 3.5.1 Time series properties 34 3.5.1.1 Unit Root Test 34 3.5.1.2 Cointegration Test 35 3.5.2 Saving Growth Causality 36 3.6 Concluding Remarks 38 Chapter IV: Volatility of Investment 40 4.1 Introduction 40 4.2 Theories of Investment 40 4.2.1 The Simple Accelerator Model 41 4.2.2 The Flexible Accelerator Model 42 4.2.3 The User Cost of Capital 43 4.2.4 The q Theory of Investment 46 4.2.5 Recent Theories of Investment 47 4.3 Proposed Investment Model 48 4.4 Findings 51 4.5 Conclusion 54 Chapter V: Findings, Policy Implications and Conclusions 55 5.1 Summary of Findings 55 5.2 The IMF and the Crisis in the Light of this Study 57 5.3 Policy Implications 59 5.4 Conclusions and Topics
48 Pages(12000 words)Coursework
Yuan Revaluation: Its Impact on the Economy of China and U.S
Recently, the appreciation of the renminbi has been accelerating, its expected appreciation having once been enhanced. There are still controversial issues on the floating scope of the RMB and the floating exchange rate flexibility. Through the analysis of the economic impact of the RMB exchange rate reform, it would not be hard to conclude that a substantial revaluation of the renminbi will not benefit China's long-term economic development.
37 Pages(9250 words)Coursework
Affordable housing policy for the first time buyer in Leeds city centre
This review paper examines the United Kingdom planning system's current housing role alongside recent household growth projections (DoE, 18, 2004) within the context of providing adequate supply of affordable housing for the first time buyer in Leeds city centre for the masses.
34 Pages(8500 words)Coursework
Housing finance and economics
But after 1970 the picture was changed a lot and the market has faced a rapid change in macro factors. Those are like free trade and markets and more than this the government intervention was also reduced a lot. So after 1970 the market was quite liberalized.
10 Pages(2500 words)Coursework
Housing and homelessness
In this context, social care services denote helping individuals by providing them with adequate support. Social care is required by people who are ill, need support and homeless as well as destitute. The basic needs of individuals are often ascertained as
16 Pages(4000 words)Coursework
Let us find you another Coursework on topic The housing crisis in the U.S for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us