Have you ever thought that your retirement or college fund can be affected by a mortgage company which lends out to someone who cannot afford payments? This might scare the hell out of you. This may not have been possible earlier but in today’s scenario overzealous sub prime lenders can cause foreclosures, discourage consumers, further worsen the slumping housing market and if the situation gets murkier it can even slowdown the economy and shake the stock market.
Jason Henderson, Economist, Federal Reserve, Omaha stated:
Things are connected implying that problems with sub-prime lending — loans to people with poor credit scores — can have broader consequences on the financial markets and the economy as a whole.
Though this spiraling situation has never occurred as of now but one can never say since negative news is flashed one moment and the other minute it has an affect on the market. So be on your toes since anything can happen any moment because the world is changing at a rapid pace.
Via builderone
