The Financial Crisis and Its Teachings

In the United States, the real estate ready are ventilated in three categories:  “Sub-prime”, “non-premium” and “surpasses”.  The category of the “sub-prime” corresponds at the level of creditworthiness the more bottom of the borrower, most often poor employees. 

These ready ones are granted by an institute of specialized credit or by a commercial bank.  They work as a true trap: the first years the sensualities of reimbursement are not very important.  But very quickly the rate rises and can attain 18%.  Number of poor employees no longer is able, then, pays their sensualities. 

This system cannot work, to the detriment of the poor employees and to the bank profit, that in a context of increase of the real estate goods.  This is, in fact, only in such a context that the credit organisms are assured, thanks to the hypotenuse that allows for them to let the good sell, to recover their capital and the already due interests the moment the borrower no longer arrives to pay its sensualities. 

But for three years, the salaries stagnate and the rates of the Federal Reserve (FED) are passed of 2% to 5.75% increasing so much the rates of the ready ones “sub-prime”, variable and indexed on the rates of the FED.  More and more numerous borrowers have therefore stopped paying their sensualities.  Their lodgings were sold to the bids which did nothing but to stress the decrease already in course of the prices of the real estate one.  During these same years, 1.2 millions of Americans lost their lodging and the position does nothing but to worsen at the same time that fizzles out the real estate speculative bubble