Which of the Following Statements Is True About the High

question 240

Multiple Choice

Which of the following statements is true about the high rate of mortgage defaults that contributed to the financial crisis of 2007-2008?

• A) High interest rates on mortgage loans were the primary cause of defaults.
• B) The high rate of defaults occurred despite the efforts of government to discourage new home ownership and slow the growth of the housing bubble.
• C) Prior to the rise in defaults, banks had become lax in their lending practices, resulting in a large number of bad loans.
• D) The high rate of defaults resulted primarily from the two years of recession preceding the mortgage default crisis.