By the height of the housing bubble in 2005 and early 2006, lenders had greatly loosened the standards for obtaining a mortgage loan, with many mortgages being granted to sub-prime borrowers ________ and "Alt-A" borrowers ________
A) with flawed credit histories; who did not document their incomes
B) who borrowed money at rates below the prime interest rate; who had AAA credit ratings
C) who borrowed more than 120 percent of the value of the house; with no proof of U.S. citizenship
D) who purchased homes in depressed housing markets; who purchased homes which were repossessed by government agencies.
Answer: A
You might also like to view...
Which of these forms of financing requires the smallest minimum size of the borrower?
A) short-term commercial bank loans B) commercial paper C) mezzanine funds D) venture capital funds
Which of the following statements is correct?
a. Interest would not exist in a nonmonetary economy. b. The present value of a future dollar payment is inversely related to both the interest rate and to how far in the future the payment will be received. c. A "positive rate of time preference" means that an individual would rather save than consume. d. During an extended inflationary period, the money (or nominal) interest rate will usually be lower than the real rate of interest.