Article: The hard and simple maths of crisis

The hard and simple maths of crisis

By Julian Delasantellis

Apr 30, 2009
Asia Times

“Mortgage defaults are not randomly distributed events, but highly related. One borrower defaults, is foreclosed upon, then, when the house undergoes a low-priced foreclosure sale, the rest of the comparable houses in the neighborhood also lose value. These homeowners can’t refinance out of their adustable rate mortgage option resets, so they default too. A surplus of homes develops, so the homebuilding and renovation industries contract, causing job losses, which cause more defaults.”

http://www.atimes.com/atimes/Global_Economy/KD30Dj03.html

Advertisements

Leave a comment

Filed under Article, United States

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s