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Google Chrome D Cenga x O Aplia: S x Macroe x G dow joi x FA who Ge x 0 Mutual x P Panc x C My Acc x G how to x courses aplia.com/af/servlet/quiz actio take Quiz&quiz; probGuid QNAPCOA801010000002 e040410080000&SWR; S Econ 3323 Prin. of Money, Credit and Banking SP16 apliar Jordan Goodman Customer Support Sign out Home Grades Personalized Reviews Discussion Course Materials The Financial System and the Economy Graded Assignment I Read Chapter 2 l Back to Assignment Due Monday 02.01.16 at 11:45 PM Average 12 Attempts: 5. The financial crisis of 2007-2009 Aa Aa Which of the following is a reason why delinquency and foreclosure rates rose in the housing market after mid-2006? O Some homeowners found the equity of their house to be negative. O Some homeowners found their mortgage rates to be lower than they expected. O Rising house prices made it profitable not to make monthly payments. True or False: Housing market woes pushed many banks to insolvency. O True O False QNA. 5 2004-2015 Ap Grade It Now Save & Continue Suggestions Session 55:29 Timeou En 4) 11:37 AM Date very 11:34 AM ach 03:52 AM 01/31/2016 11:31 01/31/2016 03:12 01/31/2016 03:12 01/31/2016 03:12 htmare 01/31/2016 08:48 ach 01/31/2016 03:47 01/29/2016 05:10 01/29/2016 03:54 xas Tech 01/29/2016 12:50 M Archive S Delete More 11:34 AM Learn More Not Junk @gmail.com& Kf account. t us for help. Unread: 111 Total: 1171

Solution

Rising house prices made it profitable not to make monthly payments.

True

The bursting of the U.S. (United States) housing bubble, which peaked in 2004,caused the values of securities tied to U.S. real estate pricing to plummet, damaging financial institutions globally. The financial crisis was triggered by a complex interplay of policies that encouraged home ownership, providing easier access to loans for (lending) borrowers, overvaluation of bundled subprimemortgages based on the theory that housing prices would continue to escalate, questionable trading practices on behalf of both buyers and sellers, compensation structures that prioritize short-term deal flow over long-term value creation, and a lack of adequate capital holdings from banks and insurance companies to back the financial commitments they were making. Questions regarding bank solvency, declines in credit availability and damaged investor confidence had an impact on globalstock markets, where securities suffered large losses during 2008 and early 2009. Economies worldwide slowed during this period, as credit tightened and international trade declined.^[12] Governments and central banks responded with unprecedented fiscal stimulus, monetary policy expansion and institutional bailouts. In the U.S., Congress passed the American Recovery and Reinvestment Act of 2009.