Mortgage Banking Meltdown Explained Thursday, November 13, 2008
Posted by ei-forum in Miscellaneous.trackback
Enspire Learning Network does it again! After their video on the explanation of the financial crisis (here), they have just released one on the mortgage banking meltdown.
They go through how mortgage banking has changed over the years with the move from banks lending to credit worthy clients to the new model where mortgage brokers acted as the middle men. Incentives changed, so did the terms, the fees, the repackaging and so on…. clearly even though the teaser rates ended after the first couple of years, as long as borrowers could refinance, they still had the illusion that the whole system was working but when things look to easy or too good to be true, it’s usually not sustainable!
Once again, they do an extremely good job at clearly explaining what actually happened and how we got to the current situation. Furthermore, apart from having distilled this issue to the real key points, their use of graphics is really great – it is a lot harder then you think to make one of these videos.
Enjoy!
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