Which of the following contributed to the rising mortgage default and foreclosure rates and the eventual economic crisis of 2008?
A) Tightened mortgage lending standards and the reduction of loanable funds during 2001-2005.
B) The increase in the greed of Wall Street bankers and other commercial lenders.
C) The substantial increase in sub-prime and adjustable rate mortgages as a share of the total during 2001-2006.
D) The increase in the household savings rate during the two decades following 1985.
E) The increase in fixed rate mortgages as a share of the total during the decade prior to the crisis.

Question

Quizplus · Accepted Answer

The substantial increase in sub-prime and adjustable rate mortgages led to higher default rates when borrowers could not afford the payments, contributing to the 2008 crisis.

Which of the Following Contributed to the Rising Mortgage Default