Mortgage crisis. by Zuzana Valkova

People are used to live in a good, comfortable conditions. They live in their beautiful houses or apartments and enjoy their privacy - their homes. But there are always people, who can not afford nice living. They don't have enough money to buy house or even small apartment. What do these people do then? They have to take loan. What else should they do? Only blessing is, that there are special loans for housing, called mortgages. But I'm not really sure about their convenience. Because of mortgage crisis in the US, are many people living in fear about their homes. Last year, it was a big hit in The US to take subprime mortgage. I had no idea what was that, but after some research, I found that I exactly know what's that. Subprime lending is kind of loan for people who don't qualify for market interest rates, or they can not, or don't want to prove if they have enough income to pay the money back, or have bad credit history. This kind of loan is dangerous for both sides. For lenders because there is no warranty, that they get their money back. And for borrowers there is a danger of taking their fortune- their house. So why do they take this kind of loan, when there is another kind? It's called A-paper loan, and its a regular loan from bank, which has lower interest rates and it's safe. But difference is that bank needs to know people's real credit history and they do investigation about their incomes. Many people can not afford this kind of mortgage, so their only hope is subprime loan.

related story: http://news.yahoo.com/s/ap/20071206/ap_on_go_ca_st_pe/mortgage_crisis;_ylt=Are866lYJZs.3WC1fF9Gj6Ks0NUE

by Zuzana Valkova for PocketNews (http://pocketnews.tv)

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