When Housing Prices Fall, as They Do After a Housing

question 49

Multiple Choice

When housing prices fall, as they do after a housing market bubble, most banks and other lenders ________ the requirement for borrowers, making it ________ for potential home buyers to obtain mortgages.

• A)tighten; easier
• B)tighten; harder
• C)ease; easier
• D)ease; harder

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Definitions:

Bond Interest

The periodic payment made to bondholders as a return on their investment, typically expressed as a percentage of the bond's face value.

Maturity

The date on which a financial obligation must be repaid or a financial instrument, such as a bond, reaches its final due date and the principal is returned to investors.

Principal Payment

The portion of a loan payment that goes towards paying down the original amount borrowed, as opposed to interest.

Installment Note

A debt instrument that requires a series of payments over time, including interest and principal.