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Economy

In reply to the discussion: Question(s) about the 2008 crash [View all]

progree

(12,103 posts)
7. A lot of the new mortgages were Adjustable Rate Mortgages (ARMs). The economy was heating up and so was
Sun Apr 21, 2024, 06:14 PM
Apr 2024

inflation so the Fed started raising their rates and the market followed. ARMs reset to higher and higher levels (a friend of mine had her ARM rate tied to 6 month LIBOR rates). So what were once very low-interest rate mortgages were no longer low interest rate. A lot of people could no longer afford their new higher and ever-increasing mortgage payments and went into foreclosure..

https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

CPI: https://data.bls.gov/timeseries/CUSR0000SA0

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