United States Economics
The Mortgage Industry

Introduction

In the United States, the mortgage market has successfully and efficiently extended home buyer credit for generations. This business has enabled millions of families to achieve the American dream of owning their own home. The use of subprime mortgages contributed to record numbers of individuals or families with different levels of income, who were previously less than credit worthy now gained greater opportunities to buy a home. Unfortunately, the use of subprime mortgages, however well intentioned, went horribly wrong by practices of poor risk management, lax government oversight, and many assets that are funded by too low equity contributed by owners.
The recent financial crisis and the role of mortgage backed securities including allegations of fraudulent activities continue to threaten the company’s financial health through sub-prime related losses. “We believe that these lawsuits further increase the company’s litigation risk and also represent a threat to scathe the company’s financial health to some extent. However, if proved or settled, the investors can breathe some relief” Market Analysis The markets have been in decline for 3 years and there is a very significant challenge that the housing market is presenting to us. We may be on the verge of a double dip recession, the economy is weakening both here and abroad, and the housing market is a significant part of that. Because prices have gone so low, willingness to purchase homes has gotten so low, there are very few starts, very few permits, very low construction activity, resulting in putting people out of jobs and it looks like it may continue for the foreseeable future. “The drop in pending home sales is clearly disappointing,” said Pierre Ellis, an