Causes
Unregulated and loosely regulated private financial entities
What is caused the 2008 housing crisis?
Prior to 2008 recession, there was a BOOM in which industry?
What is the Housing market (Real Estate)?
Between January 1, 2007 and May 30, 2011, more than _____ properties went into foreclosure.
What is 10.5 million?
When the value of the dollar decreases; an overall increase in prices or the cost of living in a country.
What is inflation?
President elected during the Global Financial Crisis.
Who is Barack Obama?
Type of Loans that were given to people with low credit rates and had a lax verification process (no income check).
What are Subprime mortgages?
The first bank to go bankrupt in 2008, and the only bank not bailed out by the government.
What is Lehman Brothers?
Between October 2008 and April of 2009, an average of _____ American workers lost their jobs each month.
What is 700,000?
When banks take away your stuff (car, house, etc) when you can't pay back loans.
What is Foreclosure?
In 2022, the median wealth gap between homeowners and renters was $_____.
What is $390,000?
How redlining contributed to the Great Recession.
How subprime mortgages caused the housing crisis from homeowners being unable to afford their payments.
What is the spike in interest rates that caused an increase in monthly payments on subprime loans for homeowners?
Housing prices fell by ___% on average from their peak in 2006 to their trough in 2012.
What is 27.4%? But fun (very much not fun) fact, housing prices fell by more than 50% in Arizona, California, Florida, and Nevada!
A type of structured asset-backed security whose value and payments are derived from a portfolio of fixed-income underlying assets.
What is a Collateralized Debt Obligation (CDO)?
Ways in which homeownership has represented an important source of wealth for US households.
What is allowing people to build equity, create generational wealth, save money on taxes, and gain wealth (increased housing values)? ALSO: you can use your home equity to invest in other things, get cash, etc.
An act passed during the Great Depression that prevented banks from getting into the insurance business, which had key aspects repealed in 1999 contributing to the housing crisis.
What is the Glass-Steagall Act?
The Financial Crisis of 2008 was so widespread.
What is uncontrolled debt and the secondary market?
What is government loans underwriters requiring higher credit scores, larger down payments, and proof of income? We could have some fun discussion about the negative impacts of this -- cutting some would-be home buyers from the market, which poses bad implications since homeownership is a path to wealth and we are handicapping the people who need this path the most.
An insurance contract in which the buyer of this makes a series of payments to the protection seller and, in exchange, receives a payoff if a security goes into default.
What is a Credit Default Swap (CDS)?
The first bank to collapse in the biggest US bankruptcy event.
What is the Lehman Brothers?
Two causes of the 2008 Financial Crisis (recession).
1) Immoderate investments and deregulation
2) loose lending standards in Housing market
3) risky Wall Street behavior
4) Subprime mortgage crisis
5) Stock Market crash
Three of the five major investment banks during the 2008 Financial Crisis.
What is Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and/or Morgan Stanley?
Black borrowers made up ___% of mortgage originations from 2005-2008, but constituted ___% of completed foreclosures?
What is 7.8% and 11.6%? Both Black and Hispanic borrowers had disproportionately high foreclosures rates compared to their share of mortgage originations.
To make an investment to reduce the risk of adverse price movements in an asset.
What is hedging?
A race-conscious and equitable aid solution created by the government to directly respond and aid homeowners of color who were hardest hit by the recession.
What is nothing? womp womp -- From 2009-2011, white wealth levels began to show signs of recovery and household wealth exhibited zero loss. Black households, however, continued to experience severe declines, with the typical household losing 40% of non-home-equity wealth. By 2031, white wealth is forecasted to be 31% below what it could have been without the Great Recession, whereas Black wealth is down almost 40%.