Mortgage Crisis Essay Example | Topics and Well Written Essays - 500 words

Mortgage Crisis - Essay ExampleSubprime borrowers, with low judge of 7% to 8%, lead see rates reset at numbers ilk 11%. Prime borrowers ar seeing rates jump to 20% and more causing them to come tight to defaulting on their loans. This increase in rates will create a domino effect neutering most of the financial markets.The mortgage crisis is simply peerless side of the coin. With the failing economy mortgage lenders and banks are finding it hard to find the cash to support the foreclosures. With the low house demand and the growing defaults companies like American Home Mortgage Investment Corp. and Delta Financial Corp., filed for Chapter 11 bankruptcy protection. Bigger banks are scummy losses as they write down their losses with even a company like Merrill kill posting its largest loss in 94-years.With the drop in employment rates and the economy in one of its worst positions for more than a decade a recession seems to be on the way. How bad the crisis will be and how it w ill alter the consumers lifestyle is what has to be determined as the mortgage crisis takes the country by storm.Being a mortgage collector I have the opportunity to review some of the ARMs, participation only and flexible payment/negative amortization loans. I have found that they are tout ensemble positioned as tools to help the borrower afford the house for a moment.