Wall Street

What Is the Subprime Mortgage Crisis? Who Was Responsible for It?

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The Street

By TheStreet.com Staff The Subprime Mortgage Crisis ExplainedAfter the smoke cleared from thedot-com bubble, the early 2000s were a heady time for the U.S. housing market, fueled by increasing demand and seemingly limitless financing. Investors were on the lookout for new, post-technology bubble investment opportunities, which they found in the form of loans to high-risk homebuyers, known as subprime mortgages. During this period, the housing sector was the cornerstone of a strong economy, accounting for 40% of all new jobs created. Construction starts had more than doubled, from an average of…

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