The Subprime Mortgage Crisis

The Subprime Mortgage Crisis was a financial meltdown that began in the mid-2000s when banks issued high-risk home loans to people with poor credit, known as subprime borrowers. Many borrowers defaulted on these loans when housing prices fell and interest rates rose, leading to widespread foreclosures. Financial institutions that invested in these risky mortgages suffered huge losses, contributing to a global economic crisis in 2007-2008. The crisis highlighted issues in the housing market and the financial system, prompting regulatory reforms aimed at preventing a similar disaster in the future.