Watching a video by Niall Ferguson on the historical origins of the economic crisis...
Basically, a sub-prime loan is when mortgages are given to people with "patchy credit histories." These are also called NINJA loans. (NO INCOME NO JOB NO ASSETS) Essentially in 2002 Bush said everyone in America should own a home. This gave more than 5 million renting and non-home-owning minorities mortgages due to relaxed standards by credit agencies.
The agencies felt fine because of a convoluted system of securities that "ensured" the money would be there if the owner defaulted on the loan.
To sum up, they de-regulated the market and gave mortgages to people who couldn't pay because Bush said it was okay..
Most of these people were minorities in ghettos... With no jobs...
I'll say no more.
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