Students Struggle With Financial Downturn

Report:

Economic uncertainty is plentiful these days, at UTD and elsewhere. The day previous, the House of Representatives rejected a $700 billion plan proposed by Treasury Secretary Henry Paulson, chairman of the Federal Reserve Board Ben Bernanke and U.S. President George W. Bush to rescue ailing financial institutions and loosen credit markets.
mortgage giants Fannie Mae and Freddie Mac, followed the unexpected collapse of Lehman Brothers Holdings and Merrill Lynch. Their failure precipitated with the wholesale restructuring of the investment banking industry, according to press releases issued by the Federal Reserve.
“This crisis is often referred to is a meltdown,” said Nathan Berg, associate professor of economics. As demand increased, so did home prices. Riskier borrowers, who in a weaker housing market would have defaulted on mortgage payments, simply sold or refinanced their homes, which were already worth more than their purchase price, Day said.
The housing bubble that resulted allowed lenders to pursue riskier loans without suffering any negative consequences. Increased defaults in the mortgage market soon infected other sectors of the economy through complex financial markets. In order to free up capital to make more loans, lenders sell their mortgages to investors. “The rating agencies were ignoring the previous three decades in the housing markets,” he said. Although poor mortgage lending practices sparked the crisis, economists disagree on the extent this was responsible for the problems in the broader economy.
Economists disagree on the severity of the economic crisis. Day said that regardless of the economic situation, UTD students should focus on their own financial responsibility.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
This entry was posted in credit scores and tagged , , , , , . Bookmark the permalink.