Que-1 It seems likel that members of Congress, even the stronger suporters of th
ID: 1252957 • Letter: Q
Question
Que-1 It seems likel that members of Congress, even the stronger suporters of the CRA and those who put the most pressure on the GSEs to buy high-risk mortgages, will likely escape being held responsible for any part of the mortgage meltdown. Can you suggest why?
Que-2 Many large lenders, along with Fannie Mae and Freddie Mac obtained funding for their activities by selling bonds that offered as collateral the motgages that were made using those funds. These bonds are often reffered to as "mortgage-backed securities". Many billions of dollars of these mortgage-backed securities were purchased by citizens and goverments of foreign lands. Explain how this fact helped the financial crisis in america spread to other nations.
please give separate and clear answer
Thanks
Explanation / Answer
politicians will most always escape prosecution because (they are the government, they set the rules and vote for the laws) so would you vote to hurt yourself if you were a politician (of course not)
MBS-mortgage backed securities hurt the financial industry (because MBS means its assets are backed by mortgages) -if the mortgage collapsed, then you have no asset. So when Billions of these are purchased by the government and civilians, if the mortgage value dropped, it equate to the asset itself evaporated.
As the largest and most powerful economy in the world, the recession or depression (depending on your opinion) would hurt the world indirectly (less imports order by USA means less export for other countries=less jobs, higher unemployment, etc for the other country.