Business Studies, Sample Thesis Papers

Thesis: Issuance of Subprime Loans

Sample Thesis Paper

One can thus say that the issuance of subprime loans started the current financial crisis which was the business of Fannie Mae and Freddie Mac which were in a better position to take this risk considering they can be bailed out from possible losses by the US government.

However, there has emerged some criticism about this blame. Many analysts are now arguing that the two mortgage giants are too heavily regulated for that to happen. This puts restrictions on them to willingly hand out subprime loans (Krugman). There are also now figures suggesting that private mortgage issuing institutions were more involved in this subprime lending during the years it was really taking off. This brings us to the view that Fannie Mae and Freddie Mac may have suffered then actually caused the credit crunch since the bursting of the housing bubble was so huge that it led to a dramatic fall in house prices leading to even the prime rated households that the two issued loans to defaulting.

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