The Ultimate Fall Out of the Subprime Crisis Essay

The Ultimate Fall Out of the Subprime Crisis - Essay Example This may include the loans that are advanced on some types of investment properties and to some self employee individuals. (Karen, 2007, p. 6) As such Subprime lending can be taken as one of risky activities not only for the borrowers but also for the lenders. This is due to high interest rates, frequent poor credit histories of the borrowers, potential adverse financial situation which may be encountered by the borrowers and others. This study will look at the Subprime problem that has rocked the US market and other markets in the world as well. There has been increased rate of home foreclosure and millions of the US homeowners have lost their homes. There is a general panic that has rocked the industry with so much uncertainty about its future. The paper looked at the Subprime crisis but leaned on the potential fall out of the crisis. This study is important since other studies which have been carried out on the subject have concentrated on the overall cause and trend of the crisis but few have looked at the potential fall out of the crisis and its consequences. The objective of the study was to understand the trend in t he crisis and therefore predict the potential fall out. The study was carried out by collective, reviewing and analyzing secondary data in order to put facts together to understand the potential fall out of the mortgage. ... From the study the authors has understood the trend in the current mortgage crisis, its causes and the potential interacting factor that have made it difficult to resolve it. The author has also understood the potential fall out of the crisis and from this it has been easily to come up with the possible strategies that could be used in the future in order to avoid the repeat of such a crisis. Therefore the study has helped the author to understand the effects that Subprime crisis is likely to have on the lenders and borrowers as well. Aims and objectives of the study The main aim of the study was to look into the Subprime crisis that has currently rocked the US home industry which has also been felt in other countries as well. In order to understand the topic well, the research was also aimed at looking into the developments in the Subprime crisis so as to come up with an understanding of the crisis and potential fall out and its effects on the homeowners. Therefore the main aim of the study was to study the ultimate fall out of the Subprime crisis. To achieve the aim of the study, there were specific objectives which had to be fulfilled first. This was important in order to understand the trend in the crisis and the potential consequences. The following were the objectives of the study; To assess the main factors which have contributed to the Subprime crisis To asses the trend in the Subprime crisis To evaluate the extent of damage that has been caused by the crisis To evaluate the potential effects of the crisis Through the achievement of the objectives the study was able to understand the subject of study well and to draw upon conclusion on the potential effects of the crisis. Therefore they were