Mortgage Market Week In Review 17

The Mortgage Market on September 19th, 2008: A Day in the Eye of the Financial Storm

September 19th, 2008, marked a critical moment in the history of the global financial system. It was a time when the world was in the grips of the most severe financial crisis since the Great Depression, a crisis that had its epicenter in the mortgage market.

The Crisis Unfolding

By this date, the mortgage market in the United States was in turmoil. The housing bubble, which had been inflating for years, had burst. Housing prices were plummeting, and foreclosures were skyrocketing. The crisis was triggered by the collapse of the subprime mortgage market, where loans were given to borrowers with poor credit histories.

Subprime Mortgage Crisis: A Catalyst

The subprime mortgage crisis was a significant contributor to the broader financial crisis. Banks and financial institutions had heavily invested in securities backed by these risky mortgages. As borrowers began to default on their loans, the securities plummeted in value, causing massive losses for financial institutions.

Government Intervention

On September 19th, 2008, in response to the growing crisis, the U.S. government took unprecedented steps. The Treasury announced a plan to buy up to $700 billion in mortgage-backed securities in an attempt to stabilize the financial markets. This plan, known as the Troubled Asset Relief Program (TARP), aimed to restore confidence in the banking system.

Impact on Lending

The crisis had a profound impact on mortgage lending. Banks, facing significant losses and increased risk, tightened their lending standards, making it more difficult for consumers to secure mortgages. The result was a significant slowdown in the housing market, further exacerbating the economic downturn.

Global Ramifications

The crisis in the U.S. mortgage market had global ramifications. Financial markets around the world were affected, as many global financial institutions had also invested in U.S. mortgage-backed securities. The crisis led to a global economic recession, with many countries experiencing significant economic downturns.

Lessons Learned

The events of September 19th, 2008, and the broader financial crisis highlighted the need for more stringent regulation in the financial and mortgage markets. It led to significant reforms aimed at preventing a similar crisis in the future, including stricter lending standards and better oversight of financial institutions.


Looking back, September 19th, 2008, stands as a pivotal day in the history of the mortgage market and the global financial system. It was a day that underscored the interconnectedness of global financial markets and the devastating impact of risky financial practices. The lessons learned from this day continue to shape financial and housing policies worldwide.

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