Sub-Prime mortgage instruments are not good investment instruments?

January 25th, 2008 | by admin |
Eddy T asked:


A mortgage is a legal agreement by which Banks lend you money to buy a house.
Speculators turn mortgages into financial instruments for investors world-wide to invest to make profits.
US Sub-Prime Mortgage crisis and the credit crunch arose mainly because ‘economic factors’ effecting their values were ignored by investment analysts.

Roberta
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    1. One Response to “Sub-Prime mortgage instruments are not good investment instruments?”

    2. By Black Knight on Jan 25, 2008 | Reply

      That’s not entirely true… the sub-primes crashed because of unfair, misleading, and predatory lending practices. The banking industry is slow to blame itself and its own greed.

      And, no, as of right now I wouldn’t call them good investment instruments - mortgages and banking sector in general… more write-downs may be coming in Q1 and Q2 2008… things might begin to look up in Q3.

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