Extraordinary Genius

1665. Chapter 1665 Chapter Crisis Causes (2/10)

At this time, the mortgage financing market in the country has already shown some crises, but it has been resolved by the Government of the United States. How did they resolve it? Very simple, adjust the interest rate.

Since last year, the Fed has continuously adjusted interest rates and kept rising. From 1%, it has risen to 5% point five.

As interest rates rise, it means that the income of these mortgage finance companies has risen, and the bank’s mortgage income has risen, but those who repay the loans have increased their pressure several times.

The interest rate of the loan, which is normally higher than the deposit rate, is also one of the main sources of bank income, absorbing deposits and lending.

And what does it mean by rising interest rates? It means that those who could have repaid their mortgages normally can’t afford it now.

The involvement of those mortgage finance companies has given many Americans the opportunity to buy a house, so that they can borrow money to buy a house even if their creditworthiness is not enough and their repayment ability is worrying.

There is also a model in which the principal repaid each month is the same, but the interest is adjusted as the bank adjusts.

Then, when the interest rate of the bank is raised several times, the interest that many people have to repay is also raised several times, which greatly increases their burden.

Some people who could afford the loan can’t afford it now. Once house prices have risen so fast, even if these people can’t afford a loan, the Corporation can auction the house without losing money, and the customer is not losing money.

However, the rate of increase in house prices is not rising at a rapid rate of interest, which means that customers are losing money now, and the mortgage finance company is also losing money.

It is also in this case that the Government of the United States decided to let the Fed cut interest rates. Although the Fed is not a Government, there is still some influence.

Unfortunately, all this is late, and many loans have become bad debts.

As the second-class subordinated loan company of the second country, the New Century Financial Corporation, issued too many loans. And in order to promote efficiency, they have granted loans to many people who did not meet the requirements at all, and some of the collateral has even been repeatedly mortgaged.

Many people’s income situation should not be successful at all. You earn a thousand dollars a month, and you have to pay more than 900 dollars. It seems that there is still wealth, but normal loans require income to double the repayment amount. The above is safer. And the rest of the money must be enough for the other person to live.

How do you live for a few dozen dollars a month? Not to mention that it is a highly developed country in the country of rice. Even in some countries with economies in general, it is not enough, and prices are there.

And many people still don’t have the money. The New Century Financial Corporation thinks of a “good way”, that is, changing the loan model. The loan method can be re-selected and the repayment method naturally changes. In this case, it can solve the problem that many people have difficulty repaying.

But this is only a temporary solution to the symptoms, and even belongs to drinking and quenching thirst. The result of this is that the financial sector in the new century has suffered more losses.

The New Century Financial Corporation is also a very fast-growing Corporation, established in 1995, and listed on 97. The 98 Asian financial turmoil has affected the world, especially the collapse of the real estate bubble in Asia, which has once again hit the country.

But at that time, the financial organization of the new century was not large, and it successfully avoided this risk, and in the following, it developed more rapidly.

When George Bush came out with this housing plan, most of the real estate finance organizations have developed rapidly, and many companies’ stock prices have also risen rapidly.

However, in the year of 02, Feng Yu triggered the network bubble in the country in advance, especially the disclosure of the company’s fake account, such as WorldCom, Enron and other means, so that the entire US Stockmarket, and even the global stockmarket have been hit hard. The year has not slowed down.

At that time, the financial organization of the new century was developing even faster. However, at the same time, the two-room group also broke the false accounting scandal.

But what’s interesting is that the scandal of the two-room group is not that they have falsely reported profits, but they have reported profits!

At that time, the profit of real estate was very high, and the two-room group also made a lot of money. However, the two companies reported many profits in order to pay less and pay less taxes.

This has given many people a signal. Now the real estate finance industry is making too much money. After making a profit, it still earns so much. So more and more people, began to enter the real estate finance field, want to make more money.

It was also at this time that the stock price of the New Century Financial Corporation was inevitably affected, but the decision makers of the Corporation believed that the market underestimated their stock price, and then they joined several companies with the same subprime loan, let They have become a real estate investment trust company, hoping to attract more investors with higher dividends.

Simply put, this new century financial corporation does not have much money at all.

However, they are daring to lend, and the review is extremely low. Even the review is a cut-off, and the amount of money they lend is rapidly expanding and superficially prosperous.

Bank lending, you go to the bank to handle, and most of them need to line up, but also review what, very complicated. But in the New World Financial Corporation, these processes are not needed at all.

They all use brokers, and even many brokers don’t even have offices in their own offices. As long as they have a phone call, the brokers will come to the door to serve the service. It is more intimate than the bank.

The New Century Financial Corporation is also like this, and it has grown rapidly to become the second-class mortgage structure of United States II. Over a decade, the market value of Corporation has soared from one million dollars to more than three billion dollars!

This Corporation is also very lenient for brokers. Many brokers have paid vacations for up to six months and even include many executives.

Under such operations, the hidden dangers of the financial organization in the new century are also growing. Many people are simply deceiving loans, and the bad debts and bad debts of the company are increasing.

The Corporation’s financial auditing organization has already discovered these problems, but they have always chosen to squat. Once the investor knows that the Corporation has lost so much, the Corporation is finished.

This kind of financial loan Corporation should have sufficient cash reserves, but this Corporation does not. So as long as the message is released, the result is doomed.

Feng Yu looked at the information that Ralph handed him. He didn’t expect the funding of the Corporation to be more than he thought. And not only the financial organization of the new century, the same Corporation, there are many, it is almost the same situation.

Feng Yu puts the information down: “Ralph, tell them that the plan can begin!”

……

PS: The title of the previous chapter is wrong. The content has been revised. Don’t worry, reload it. I have already asked Vene to help modify the chapter name.