Mortgage, the Number One Cause of the Global Recession?
Last lesson I had Murray Carlson and a special guest of Sauder’s Dean, Dean Dan Muzyka to talk about financial crisis and financial breakdown. One major cause of global financial issues is mortgage or what most of us known as a bank loan purchased to buy homes. I found the topic really interesting and found a video which correlated what the lesson was about.
The video states one major reason of why people failed to pay back their mortgage loans; the bank is too lenient in giving out mortgages. They don’t pick future borrowers selectively and neglects employment documentation and income reports during the borrowing process. In other words, the banks too easily give out loans. A few years ago when the global economic condition was on recession, mortgage was claimed as one of the major reasons causing a drop in stock sales, value of bonds. Banks were losing money because people couldn’t pay back the money they have borrowed.