Financial Education
I made a speech today in comm 299 about the financial crisis, specifically with regards to the sub-prime mortgage crisis. We talked about this topic in class for a little bit, but i found it very interesting. After the class i remember wondering who really was responsible for the whole thing? Now, i am here today to share my opinion on it with you.
Basically what happened was that people were buying houses on initially cheap mortgages hoping to sell the house in a bit to make some money. The housing market was rising so this looked very promising. What happened though was that the “real estate bubble popped”, and the housing prices plummeted. Now, all these people who cannot sell their houses now, are stuck with a house with an adjustable mortgage rate. When the rate changed they couldn’t pay. This cause lots of money to be lost in the government because of how much credit people had out.
What i believe is that, although there were many contributors to the financial crisis, the main cause was the general ignorance and financial stupidity of the people who took the mortgages. Why would someone do that?