Subprime mortgage crisis/Timelines

Sources

In addition to the sources that can be reached using the internet links shown thus [99], this timeline draws upon otherwise unpublished information obtained by interview and published in Fools Gold by Gillian Tett (see the bibliography subpage). Numbers shown thus {123} are the relevant page numbers in that book.

The 1980s

Financial deregulation [1], [2].

Savings and Loans crisis - Failure of 296 US "Savings and Loans" mortgage lenders [3]

1990 - 2003

Progressive discount rate cuts by Federal Reserve (from 7% in 1990 to 0.75% in 2003 [4].

Housing boom begins (8% increase 2002 to 2003)

1999

Fannie Mae eases credit terms for subprime mortgages [5]

2002

President sets target for expanding minority home-owning [6].

2003 - 2006

Progressive discount rate increases (from 0.75% to 6.25% in 2006).

Housing boom continues [7] (Average 2006 house price about 70% above 2000 level)

2007

June

25 Two of the Bear Stearns bank's hedge funds are threatened by losses from mortgage defaults [8].

August

6 American Home Mortgage becomes bankrupt [9].

9 French bank BNP Paribas freezes some of its funds because it is unable to value its US mortgage-backed assets. [10]

2008

January

Distress sale of US mortgage lender Countrywide to the Bank of America bank (after its share price had dropped by 48%). [11].

March

Bear Stearns bank rescued following losses relating to mortgage-related assets by its hedge funds. [12]

April

The global subprime crisis costs could reach $1 trillion (IMF estimate) [13].

The IMF forecasts US recession and world growth slowdown [14].

June

US house prices 20% below 2006 peak [15].

August

Mortgage lenders Fannie Mae and Freddie Mac are rescued from bankruptcy [16].

September

7 Fannie Mae and Freddie Mac nationalised [17].

12 Lehman Brothers bankrupt[18] with losses of up to $160 billion to holders of its unsecured bonds.

'For further developments see crash of 2008 [19]'