Subprime mortgage crisis

The subprime mortgages crisis arose from defaults on the United States mortgage markets, and led to the global 2007-2008 financial crisis.

Glossary

For definitions of the terms shown in italics in this article, please see the glossary.

Timeline

The Timeline subpage lists the major events of the crisis with links to contemporary news reports.

The Crisis

Unexpected defaults by the holders of some mortgages placed some mortgage lenders in financial difficulties and led to general uncertainty concerning the value of mortgage-backed securities. Operators in the financial markets became reluctant lend money on the security of those securities, placing other holders of those securities in difficulties. There developed a loss of confidence in a wide range of banks and other financial institutions suspected of being vulnerable to the falling value of their holdings of mortgage-related securities, and that created a widespread financial crisis.

Among the factors that are considered to have contributed to the development of the crisis are the conduct of monetary policy, the inflow of funds from abroad, the creation of new ways of financing mortgages, the policies adopted by the various providers of mortgage finance, and the consequent behaviour of the housing markets.