WHAT WERE THE REASONS FOR THE FINANCIAL CRISIS IN US?

since the goverment backed so many mortgages, mortgage companies too more risks than they otherwise would, and a lot of those mortgages were sub-prime, and the people who took them out were too dumb to realize their mortgages rates would go up a lot.



consumers got into more debt per GNP than at any time since 1929 (coincidence?)



Government spent way too much money over the past 8 years.WHAT WERE THE REASONS FOR THE FINANCIAL CRISIS IN US?
Greed, top people wanting more for themselves. It sucks that the markets crashed the way they did, but it was good on the note that allot of scam ponzi schemes have gotten busted during the process. There is another one everyday because of the crash. Allot of it to came from banks giving way to much unsecured credit to people and i think NEWS and SPECULATORS only make things seem worse than they are. Why did Oil jump so high? now to fall back. We are spectators to the speculators who have $$ on there mind.

You want information start with beazer homes. It started from there, they were getting people into houses with low montly payments but in fine print in which many didn't read they double or triple in 2 years. great way to sell more houses to people that shouldn't be in them. Same with car lots. You can go to alot of car lots right now and they will make you a fake check stub to get you into that car you want. its all about how much and quick you can sell and get the banks to finance the person your trying to get financed. Say your a car dealer, you make 500 bucks per sale of a car, you want that 500 bucks at all cost cause you gotta pay your own bills. situations like this leads to failure. The bank gets scammed
in a nut shell lack of prudent financial oversight , caused by the republican ideology of small government and a belif the capitalist system is self regulating, caused poor lending standards and loans were made to people who could not afford them, this in turn increased the value of the homes used by everyone as security, when the lending standards got worse and worse the first forclosures occured, this depressed prices slightly, this stopped lending, the lending companies no longer has an income, this caused the bad ones to colapse, this cause house prices to fall more, this made the good lenders stop lending, this made the house prices fall alot. banks then got into trouble



banks would no longer lend to each othe r,as they cant be sure they bank they are lending to wont collapse, the banking system grinds to a halt



the government intervenes to try to keep the banking secotor working





house prices fall more





every bank is in trouble as they have made good loans well secured , now the security isnt worth as much, the government buys some of the bad loans in return for a share ofthe banks. Freddie MAc and Fannie May are over whelemed by the number of bad loans





lack of willingness to lend spreads to commerical loans and the building sector is no longer building more new homes



the economy starts to contract, people are put out of work, this lowers the price of houses more, the economy falls the price of houses gets worse





Obama has ahuge job ahead

this will take years to fixWHAT WERE THE REASONS FOR THE FINANCIAL CRISIS IN US?
The main reason is greed. There are several things that happened over a number of years. One reason is that the government policies put in place during the Clinton administration which required lenders to make a certain percentage of loans to low income people who could not otherwise qualify for a home loan. Another is the variable interest rates these lender put into these contracts. Most may have been able to make their payments while the variable rates were low, but when the higher rates kicked in they could not afford the higher rates. At the time these loans were being made real estate prices were going up at a high rate in some cases. Those who made the original loans sold them to investors who were unwilling to make these loans into a lower fixed rate loan that people could afford to pay. When the real estate market collapsed these investors and banks who owned the paper cried foul. They lost their shirts when values plummeted and they could not recover their money. Personally, I think they wanted people to be unable to meet their mortgage obligations so that they could make a tidy profit on the increased real estate values. When the values declined the people were upside down and they started to get into trouble. I believe many of these investment companies and banks also invested heavily in the oil future market. The reason is that the collapse of the price of oil coincided with the collapse of the real estate market. Had the government not forced these lenders to make loans to those who could not afford them and had lenders worked with borrowers to give them a fixed rate mortgage they could afford I believe this entire problem would not have happened.



Another thing that happened to contribute to this situation is that these investment companies and banks were virtually unregulated. Those elected representatives such as Barney Frank were out to lunch. They didn't do the job they were assigned to do. These people actually took campaign contributions from those they were assigned to over see which has the appearance of corruption. Some of these problems have to do with electing lawyers to office where they can make and alter laws to benefit their industry and that of their clients. It is a conflict of interest.



I could go on but basically it was greed and corruption at the corporate and political level. Those assigned to protect our interests sold their souls for a few pieces of silver. We still don't know what happened to billions of dollars in the first stimulus tax.
the greedy banks and moregate houses making sub prime loans, and ceo's of those companies getting 10 to 100 million dollar bonus when their banks are failing. The war in Iraq. The wall street investors ponzi schemes robbing the small time investors, of billions of dollars and finally 8 years of ex-president bush's mismanagement of the state of the American economy, sending and out sourcing American jobs to foreign nations.WHAT WERE THE REASONS FOR THE FINANCIAL CRISIS IN US?
Greed and poor judgment.



There's a whole page of technical "reasons" but I guarantee you that they all originate with the above.
...FAILURE of IMAGINATION --- no one truly believed that it would ever happen again...
GREED AND MATERIALISM
banks handing out loans to people who they knew could not repay them.
The war.
George W.