Click on the links on the right to answer the following questions.
Use Link 1 to answer the following question. True or False: One of the causes behind the recent financial turmoil can be attributed to the increase in defaults in the subprime mortgage market.
| A. |
| B. |
Use Link 2 to answer the following questions. True or False: In 2006, 50% of subprime mortgages were issued by private lending.
| A. |
| B. |
True or False: In 2006, 5 out of 25 subprime lenders were subject to mortgage laws and regulations.
| A. |
| B. |
Use Link 3 to answer the following questions. True or False: From 2004 to 2006 in the United States, the percentage of subprime mortgages increased from 8% to approximately 20%.
| A. |
| B. |
True or False: In 2006, 40% of subprime mortgages were adjustable rate mortgages.
| A. |
| B. |
Use Link 4 to answer the following question. True or False: A strategic default can have a negative impact on a consumer’s credit score.
| A. |
| B. |
Given the fact that it will be difficult to qualify for a new mortgage in the future, why do some homeowners still voluntarily foreclose on their home? Discuss.
Discuss the pros and cons of strategic defaults.
Discuss the pros and cons of subprime lending.
<<Settings>> [suggested defaults are bold]