Sub prime crisis and interest rates hikes ,what is happening?

Question

Sub prime crisis and interest rates hikes ,what is happening?

Answer 1

hi, i am going to try answer this question with the slight knowledge i got from this topic - yahoo community pls correct me if i am wrong ok? if i am not mistaken, sub prime crisis emerge as the interest rates for loans for people who do not meet the normal loan requirement escalate. this is often accompanied by over-valuation of property prices. when these people are not able to service their loans, the money lenders being afraid that they are not able to recover the money they lent out increase their interest rates - hence the hike. if you want to learn more about this topic, you may want to goggle it or do a search in wikipedia =D