Define the following terms and explain why they were important during the housing and credit crisis of 2007–2009. · Securitization · Subprime loans · Asset write-down. Securitization

Define the following terms and explain why they were important during the housing and credit crisis of 2007–2009. · Securitization · Subprime loans · Asset write-down.
Securitization
CONTENT
Due to the 2008 subprime crisis, securitization was given a poor reputation. Different assets can be combined to make securitization. Then, they are repackaged as attention securities. The asset purchasers get both the principal and interest installments. After the United States started pooling its mortgages in 1970s, government-sponsored entities began securitizing assets (Jobst 2017, 2017). Others income-producing assets, such as land and property, were securitized first in 1980s. In recent years, the market for these has grown quickly (Hansen 2025). Unanticipated decreases in value in a few of the underlying assets weakened investor confidence in some markets, such as those used to reassuring subprime loans in America. The beneficial and benign effects of securitization seem to be apparent. Securitization is still being criticized because it lures investors to take more risk. This can be due to the low returns on sign-offs product lines, lower default rates than historical experience and a wide range of hedging options (Hansen 2020). Because many mortgages weren’t held in the accounts of companies who securitized them they were unlikely to conduct thorough background checks on borrowers. Cont…
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