Chapter 1669: The Subprime Mortgage Crisis

Feng Yu woke up from his sleep, the plane was about to land, and he came to New York again.

Fengyu Consulting bought a lot of stocks of American real estate companies. This time he came to see when is the most suitable time to sell.

Many people in previous lives know that the serious subprime mortgage crisis broke out in the United States this year, and quickly spread to the global financial industry. Most people think that the fuse is the two groups.

But in fact, there are already some clues now, and the real trigger is the second largest subprime mortgage lender in the United States-New Century Financial Corporation.

What is a subprime mortgage? That is, the United States divides personal credit into five grades. Among them, the first and second grades of credit are excellent and good, and can be used for preferential loans, and the remaining three grades of credit are lower, and can only use subprime loans.

To put it bluntly, subprime loans are loans prepared for those with poor credit and low income.

Many people know that people in the United States like to live on loans. All kinds of bank loans, credit card consumption in advance, etc., they think this kind of life is very good, and enjoy life in their lifetime.

And Huaxia's model of saving money and then spending it after saving enough money is very ridiculous to them.

Because many products, when you save enough money, the price has already increased. The price increase may exceed bank interest rates. So why not take a loan for consumption? It can not only reflect enjoying a better life, but also save money.

But this statement is also very ridiculous, because the price of many products is reduced over time, which means that the purchased product is depreciated.

Then you have to pay high interest for this product, and naturally you will lose more. It is true that you have enjoyed it in advance, but you may let this burden weigh you down for half your life.

Unless it is just needed, living like this, in the eyes of many Chinese people, is eating without money and earning food, which is a prodigal behavior!

Many Chinese people dare not take out loans, for fear that they will not be able to pay. However, the loans in the United States are very bold. What if they do not pay? Simple, take another loan from another bank and pay back the money here, right?

Two credit cards are swiped in sets, and the repayment time difference between each other is one month, so that there is an extra month to make money, and the money can be repaid.

In theory, this is the case, but what if you don't make enough money? If you originally borrowed 10,000 yuan, you only need to repay 10,200, but if you borrow another 10,200 from another bank, you will have to repay more.

After swiping through multiple credit cards, you will find that the original 10,000 yuan borrowed has become 12,000 yuan, and it is still growing.

As long as there is a bank that thinks that you are late for repayment and blocks you, the plan will die, and the borrower may have to use other assets to pay off the debt. If not, then the only option is bankruptcy protection.

It seems that bankruptcy is a kind of protection for you. You don't need to pay back the money in a hurry, or even don't have to pay it back. But during the period of bankruptcy protection, all your consumption will be restricted, and you will also be supervised by the bank and even the police. How can people who are used to living a comfortable life accept this?

On the contrary, many older people like this. Once they go bankrupt, some of them would rather go to jail, and it would be nice to have food and drink, which is better than starving to death on a street corner.

Normally, when you take out a loan, banks and other financial institutions must evaluate your repayment ability to confirm that you can repay the money.

You either have a steady income, or a fixed asset mortgage, or a guarantor, etc.

But these are all for preferential loans in the United States. For subprime loans, these conditions can be relaxed.

As long as you can prove that you have income, you can basically get a loan. guarantor review,

It is not rigorous enough at all, and even many guarantors have no occupations, and they can just find a short-term job. There are also mortgage loans. The collateral is not worth that price at all, and some companies dare to lend money.

Many people here also have the same thought as the Huaxia people, that is, they are worried that they will not be paid. They are still young people and don't want to go to jail. The outside world is so good.

The root cause is Xiao Bushi. After he came to power, he launched a housing purchase plan for ethnic minorities. He wants to complete at least 5.5 million minority home purchases during his term.

He said promoting home ownership is an important factor in keeping America safe.

However, families of ethnic minorities have low levels of education, and it is difficult for them to find good jobs with stable income. How can they buy a house?

At this time, the subprime loan program is needed.

For subprime loans, the interest to be paid is at least 2% to 3% higher than that of preferential-grade loans. In short, the worse your credit, the higher the interest.

Speaking of this, do you have a feeling that this subprime loan is basically to extract wool from thin sheep. The thinner you are, the more you will be squeezed.

Their income is low, and the loan interest is also higher, and they are under greater pressure to repay the loan, which has planted a serious hidden danger.

That is, these people are very likely to repay the loan. In this way, the bank will suffer losses, bad debts, and bad debts.

But what does the loss of the bank have to do with the two rooms?

Two Fangfang Group is an important part of the plan to promote the purchase of houses. They buy mortgage loans from banks and then make money.

What does that mean? That is, the bank originally lent 1 million, and could get back 1 million principal and 1 million interest, but sold it to Liangfang Group for only 1.5 million.

In this way, the bank has more capital turnover, which can be lent to those who buy houses, and the two rooms have also earned a sum of interest. When you see this, do you feel a little familiar?

Many financial companies lend money to individuals, which is actually a high-interest loan. What if they can't get their money back? Sell ​​the IOU and sell it to those collection companies.

One million IOUs, two million repayments, they sold to the collection company for 1.3 million, and the collection company found a way to recover the 1.5 million and made a profit. They have some profit, and the collection company also has some profit.

To put it bluntly, Liangfang Group is the role of an account collection company, but with the acquiescence of the National Congress, it has turned accounts into bonds and other financial products and issued them.

Two Fangfang Group did make a lot of profits in the beginning. It is said that their CEO earns more than 15 million U.S. dollars every year. Among the CEOs of the world's top 500 companies, there are only a few People can stand shoulder to shoulder.

Where did the two companies get the money to buy the mortgage loan from the bank? One is to go public, and the other is to issue its own funds, bonds, etc.

In the previous life, Huaxia State-owned Assets bought a lot of bonds of the two groups, and ended up losing a lot of money, paying for the crisis in the United States.

But in this life, Huaxia State-owned Assets has already sold the bonds of the two companies, and even the stocks in the real estate industry have been sold according to Feng Yu's suggestion. This mistake can only be made by Americans themselves!

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