US grapples with impact of subprime crash

US grapples with impact of subprime crash

7.30 Report | Mon, 13 Aug 2007 22:01:00 +1000 | Duration 6m 54s

Whether the subprime loan market crash does slow down the US economy or not, it is certainly continuing to have a dramatic effect on global financial markets, and that impact could continue to roll through for the next six to 12 months. It all goes back to 2005 when US real estate markets hit an all-time high, and more and more people began to use creative financing to get a piece of the action. Subprime mortgages became the vehicle of choice for many with low incomes or a poor credit rating, who might not have otherwise been able to get a loan. There was a catch though: subprime loans carried conditions like reset ...

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