The subprime mortgage crisis is a financial and real estate crisis that has been going on in the United States between the years 2007 and 2010. It began because of a drastic increase in mortgage delinquencies, foreclosures, failures in credit default swaps, saturation of the debt and real estate markets and reverse trading. All these parameters had an adverse effect on the financial markets and banks all over the world.
In recent times, The United States witnessed a rise in the number of adjustable-rate mortgages. Roughly, 80% of the mortgages that were issued to numerous subprime borrowers were of this kind. After the peak of the United States’ real estate market in the year 2006, real estate prices began to crash and their refinancing became more and more complex. The rate of mortgage delinquencies grew drastically because adjustable-rate mortgages were resetting at higher rates..
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