Is the sub prime lending crises due to banks trying to unload mortgages/bussiness loans of illegal alians?

What are the major ';low'; lending standards that has caused the ';sub prime'; mortgages crises?Is the sub prime lending crises due to banks trying to unload mortgages/bussiness loans of illegal alians?
It mainly dealt with subprime mortgages (people with bad credit given terrible mortgages with bad terms) and other adjustable rate mortgages. These loans were made to many different people, not illegal aliens. These mortgages did not have fixed interest rates. When you have an ARM (Adjustable Rate Mortgage) your payment goes up after the teaser rate period ends. Needless to say, many people did not understand their mortgages when they signed up for them and when their payments went up, they were unable to make them which lead to foreclosures.





I directly work with corporate finance and what are called asset backed securities and mortgage backed securities. These are loans that are grouped together and ';securitized'; and then sold off as fixed income investments. As people defaulted on their mortgages, prices on these securities plummetted which has had a profound impact on the economy.





The lesson to learn, you need to deal with lenders and financial advisors who have the heart of a teacher and will take the time to help you understand. Also, we need to educate ourselves so that we can make decisions on our own that we can trust.





Hope this helps!Is the sub prime lending crises due to banks trying to unload mortgages/bussiness loans of illegal alians?
No. The subprime crisis has nothing to do with illegal aliens.





The crisis was caused by mortgage companies giving loans to people with bad credit. People with bad credit are less interest rate sensitive meaning that the loans can be very very profitable......if they are paid. Unfortunately, the mortgage companies found something out the hard way. People with bad credit often default on their obligations.





Also, people tend to be very short term thinkers and want show off the big home to the friends and family. So they buy using a mortgage that gives them the lowest monthly payment (interest only or adjustable rate mortgages). A few years go buy and their rate adjusts and all of a sudden they can no longer afford their home.
No, its due to lenders not adequately screening borrowers' income and credit history and borrowers too ignorant to avoid getting in over their heads. Then these loans were repackaged and resold as ';investment grade'; bonds.