The Mortgage Crisis in The USA And The Main Occurrences
May 3, 2011 Mortgage Information
In August of 2007, the global subprime mortgage crisis happened in the USA without any warnings before. The crisis expanded to the financial centers such as London, Paris, Tokyo … It is the first time so many banks have fallen into the global mortgage crisis. This article will summarize the first happenings of the world mortgage crisis.
At the first days of August, 2007, the investment bank Bear Stearns informed its loss of more than a half of the assets. The loss happened due to the considerable fall of the value of the list of investments in mortgage loans. The clients were not able to draw their money and the only thing they can do is to observe the loss of the value of the investments hopelessly.
Banque Nationale Paribas, the largest bank in France, put off the activities of the insurance funds due to the loss of the availability of the market of mortgage securities. In the next days, the two big banks in China, China industrial and commercial Bank and China Bank publicized the loss of 11 billion USD dollars. This was caused by the risks involved with the mortgage loans.
In England, it is the first time since the great crisis of 1930, the people had to make queue in front of the banks in order to draw their money. From that time, the information about the happenings spread and led to the global financial shock.
The financial crisis was derived from the subprime mortgage loans in America. In August of 2007, the late payment rate increased to 36%, recoded as the highest rate for the last 16 years. The owners of houses quickly became insolvent and they had no choice to have their houses confiscated by the banks. This caused the seriousness of the crisis for the next 3 years.