Mortgage Resource Guide
2008 Mortgage Crisis
154 articles10 sections
Causes of the crisis
- What Caused the 2008 Mortgage Crisis?Start here Risky subprime and adjustable-rate loans, private mortgage securities rated AAA, and heavy borrowing by lenders turned the 2006 home price peak into a 2008 crash.
- Did Fannie Mae and Freddie Mac Cause the 2008 Mortgage Crisis? Not by themselves. The crisis commission found Fannie Mae and Freddie Mac contributed but followed Wall Street; they failed in 2008 and remain in conservatorship.
- What Are Subprime Mortgages? A subprime mortgage is a higher-rate loan to a borrower with weak credit, such as a score of 660 or below. Before 2008 most were teaser-rate ARMs like the 2/28.
Recovery and future risk
- How Did the United States Recover from the 2008 Mortgage Crisis? Fed bond buying, the Fannie and Freddie takeover, TARP, 1.7 million HAMP modifications, and 3.5 million HARP refinances; home prices took until 2017 to recover.
- How Do I Protect Myself from the Possibility of a Future Mortgage Crisis? Pick a payment you can carry if rates or income change, keep about 6 months of cash, build equity, insure your income, and call your servicer early if you fall behind.
Timeline and effects
- What Was the Timeline of the 2008 Mortgage Crisis? Home prices peaked in July 2006, subprime lenders failed in 2007, Lehman collapsed in September 2008, and prices bottomed in February 2012, about 27% lower.
- What Were the Effects of the 2008 Mortgage Crisis? About 4 million families lost homes to foreclosure, home prices fell 27%, 8.7 million jobs disappeared, and median family net worth fell 38.8% from 2007 to 2010.
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