Guangdong University Housing Bubble and Foreclosures Discussion

This week we talked about Mortgages. There are various types of mortgages, including fixed-rate mortgages and adjustable rate mortgages.

Beginning in 2005 – 2006, the U.S. housing market began to experience a “housing bubble”. Many homeowners loss their homes during this period.

This homework assignment will cover mortgages and the “housing bubble”. The homework assignment should consist of three paragraphs. The paragraphs should be three to five sentences long, not longer.

In the first paragraph, describe the “housing bubble”. This paragraph should include the definition for “foreclosure” and how “foreclosures” were a part of the housing bubble.

In the second paragraph, define and compare fix-rate mortgages and adjustable rate mortgages.

In the third paragraph, tell me why many economic experts believes adjustable rate mortgages contributed to the “housing bubble” and how a fixed rate mortgage could have had a different impact.