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National Mortgage Crisis Of The 1930s
The National Mortgage Crisis of the 1930s was a Depression-era crisis in the United States characterized by high-default rates and soaring loan-to-value ratios in the residential housing market. Rapid expansion in the residential non-farm housing market through the 1920s created a housing bubble inflated in part by ''ad hoc'' innovation on the part of the four primary financial intermediaries – commercial banks, life insurance companies, mutual savings banks, and Building & Loans (thrifts). As a result, the federal overhaul stemming from New Deal legislation gave rise to a paradigmatic shift in mortgage lending, popularizing longer-term maturity, fully amortizing mortgages and creating a thick secondary market for mortgage-related securities. Pre-crash lending policies Lending was dominated by four financial intermediaries – commercial banks, life insurance companies, mutual savings banks, and thrifts (also called Savings and Loan Associations, or S&Ls) – though only li ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Great Depression
The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and business failures around the world. The economic contagion began in 1929 in the United States, the largest economy in the world, with the devastating Wall Street stock market crash of October 1929 often considered the beginning of the Depression. Among the countries with the most unemployed were the U.S., the United Kingdom, and Weimar Republic, Germany. The Depression was preceded by a period of industrial growth and social development known as the "Roaring Twenties". Much of the profit generated by the boom was invested in speculation, such as on the stock market, contributing to growing Wealth inequality in the United States, wealth inequality. Banks were subject to laissez-faire, minimal regulation, resulting in loose lending and wides ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Footnotes
In publishing, a note is a brief text in which the author comments on the subject and themes of the book and names supporting citations. In the editorial production of books and documents, typographically, a note is usually several lines of text at the bottom of the page, at the end of a chapter, at the end of a volume, or a house-style typographic usage throughout the text. Notes are usually identified with superscript numbers or a symbol.''The Oxford Companion to the English Language'' (1992) p. 709. Footnotes are informational notes located at the foot of the thematically relevant page, whilst endnotes are informational notes published at the end of a chapter, the end of a volume, or the conclusion of a multi-volume book. Unlike footnotes, which require manipulating the page design (text-block and page layouts) to accommodate the additional text, endnotes are advantageous to editorial production because the textual inclusion does not alter the design of the publication. H ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Federal National Mortgage Association
The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company. Founded in 1938 during the Great Depression as part of the New Deal, the corporation's purpose is to expand the secondary mortgage market by securitizing mortgage loans in the form of mortgage-backed securities (MBS), allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on locally based savings and loan associations (or "thrifts"). Its brother organization is the Federal Home Loan Mortgage Corporation (FHLMC), better known as Freddie Mac. In 2024, with over $4.3 trillion in assets, Fannie Mae is the largest company in the United States and the fifth largest company in the world, by assets. Fannie Mae was ranked number 27 on the ''Fortune'' 500 rankings of the largest United States corporati ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Savings And Loan Crisis
The savings and loan crisis of the 1980s and 1990s (commonly dubbed the S&L crisis) was the failure of approximately a third of the savings and loan associations (S&Ls or thrifts) in the United States between 1986 and 1995. These thrifts were banks that historically specialized in fixed-rate mortgage lending. The Federal Savings and Loan Insurance Corporation (FSLIC) closed or otherwise resolved 296 thrifts from 1986 to 1989, whereupon the newly established Resolution Trust Corporation (RTC) took up these responsibilities. The two agencies closed 1,043 banks that held $519 billion in assets. The total cost of taxpayers by the end of 1999 was $123.8 billion with an additional $29.1 billion of losses imposed onto the thrift industry. Starting in 1979 and through the early 1980s, the Federal Reserve sharply increased interest rates in an effort to reduce inflation. At that time, thrifts had issued long-term loans at fixed interest rates that were lower than prevailing deposit rates ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Federal Savings And Loan Insurance Corporation
The Federal Savings and Loan Insurance Corporation (FSLIC) was an institution that administered deposit insurance for savings and loan institutions in the United States. History Establishment The FSLIC was established by the National Housing Act of 1934, which was signed into law by President Franklin D. Roosevelt on June 27, 1934. Upon the creation of the FSLIC, it was assigned a capital stock of $100,000,000. All federal savings and loan associations were required to apply for insurance through the FSLIC; other building and loan associations whose capital was not impaired were also allowed to apply. The FSLIC was given certain regulatory powers over insured institutions, requiring each institution to accumulate reserves over several years. FSLIC assessed an annual insurance premium, which was calculated as 0.25% of the total amount of all accounts of insured shareholders or members, plus any creditor obligations. The FSLIC would suspend insurance premiums whenever the FSLIC's re ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Federal Housing Administration
The Federal Housing Administration (FHA), also known as the Office of Housing within the Department of Housing and Urban Development (HUD), is a Independent agencies of the United States government, United States government agency founded by President Franklin D. Roosevelt, Franklin Delano Roosevelt, established in part by the National Housing Act of 1934. Its primary function is to provide Mortgage insurance, insurance for mortgages originated by private lenders for various types of properties, including single-family homes, multifamily rental properties, hospitals, and residential care facilities. FHA mortgage insurance serves to safeguard these private lenders from financial losses. In the event that a property owner Default (finance), defaults on their mortgage, FHA steps in to compensate the lender for the outstanding principal balance. Under this insurance arrangement, lenders assume a diminished level of risk, thereby allowing them to offer a larger number of mortgages. T ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
National Housing Act Of 1934
The National Act of 1934, , , also called the Better Housing Program, was part of the New Deal passed during the Great Depression in order to make housing and home mortgages more affordable. It created the Federal Housing Administration (FHA) and the Federal Savings and Loan Insurance Corporation (FSLIC). The Act was designed to stop the tide of bank foreclosures on family homes during the Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and .... With this, President Franklin D. Roosevelt used this act to fulfill his goal towards a government program funded by private investments, avoiding the reliance on taxpayer funds. The passing of the bill alleviated unemployment by making credit more accessible through banks and lending organizations. Both the FHA and the FS ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Balloon Payment Mortgage
A balloon payment mortgage is a mortgage loan, mortgage that does not fully amortization (business), amortize over the term of the mortgage note, note, thus leaving a balance due at Maturity (finance), maturity.Wiedemer, John P, ''Real Estate Finance, 8th Edition'', p 109-110 The final payment is called a ''balloon payment'' because of its large size. Balloon payment mortgages are more common in Commercial property, commercial real estate than in residential real estate today due to the prevalence of mortgages with longer periods of amortization, in particular, the 30-year fixed-rate mortgages.Fabozzi, Frank J. (ed), ''Handbook of Mortgage-Backed Securities, 6th Edition'', p 1125 A balloon payment mortgage may have a fixed or a floating interest rate. The most common way of describing a ''balloon loan'' uses the terminology ''X'' due in ''Y'', where ''X'' is the number of years over which the loan is amortized, and ''Y'' is the year in which the principal balance is due. An exampl ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Loan-to-value
The loan-to-value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. In real estate, the term is commonly used by banks and building societies to represent the ratio of the first mortgage line as a percentage of the total appraised value of real property. For instance, if someone borrows to purchase a house worth , the LTV ratio is or , or 87%. The remaining 13% represent the lender's haircut, adding up to 100% and being covered from the borrower's equity. The higher the LTV ratio, the riskier the loan is for a lender. The valuation of a property is typically determined by an appraiser, but a better measure is an arms-length transaction between a willing buyer and a willing seller. Typically, banks will utilize the lesser of the appraised value and purchase price if the purchase is "recent" (within 1–2 years). Risk Loan to value is one of the key risk factors that lenders assess when qualifying borrowers f ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Amortizing Loan
In banking and finance, an amortizing loan is a loan where the principal of the loan is paid down over the life of the loan (that is, amortized) according to an amortization schedule, typically through equal payments. Similarly, an amortizing bond is a bond that repays part of the principal ( face value) along with the coupon payments. Compare with a sinking fund, which amortizes the total debt outstanding by repurchasing some bonds. Each payment to the lender will consist of a portion of interest and a portion of principal. Mortgage loans are typically amortizing loans. The calculations for an amortizing loan are those of an annuity using the time value of money formulas and can be done using an amortization calculator. An amortizing loan should be contrasted with a bullet loan, where a large portion of the loan will be paid at the final maturity date instead of being paid down gradually over the loan's life. An accumulated amortization loan represents the amount of amortiz ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
New Deal
The New Deal was a series of wide-reaching economic, social, and political reforms enacted by President Franklin D. Roosevelt in the United States between 1933 and 1938, in response to the Great Depression in the United States, Great Depression, which had started in 1929. Roosevelt introduced the phrase upon accepting the Democratic Party (United States), Democratic Party's presidential nomination in 1932 before winning the election in a landslide over incumbent Herbert Hoover, whose administration was viewed by many as doing too little to help those affected. Roosevelt believed that the depression was caused by inherent market instability and too little demand per the Keynesian model of economics and that massive government intervention was necessary to stabilize and rationalize the economy. During First 100 days of the Franklin D. Roosevelt presidency, Roosevelt's first hundred days in office in 1933 until 1935, he introduced what historians refer to as the "First New Deal", ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
