How Did the Deregulation of the Mortgage Industry in 1999

question 68

Multiple Choice

How did the deregulation of the mortgage industry in 1999 help produce the housing crisis of
2007 and 2008?

• A)It drove housing prices down by preventing too many qualified people from obtaining the mortgages needed to purchase homes.
• B)It allowed many new mortgage companies to form,offering "predatory" loans that people could not afford to repay.
• C)It made foreclosures almost impossible under the law and allowed many people to stop paying their mortgages with no monetary penalties.
• D)It eliminated most mortgage companies and forced potential homeowners to pay cash for their homes.

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Definitions:

Equivalent Units

A concept in cost accounting used to allocate production costs between completed and partially completed goods.

FIFO Method

First-In, First-Out method, an inventory valuation technique where goods first added to inventory are assumed to be the first ones sold.

Cost Per Equivalent Unit

A calculation used in process costing to allocate costs equally among produced units.

Weighted-Average Method

An accounting method used in inventory valuation or cost accounting that averages the costs of all goods available for sale based on their weights.