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what does means defaults on home mortgages The global financial crisis started in the United States with bank failures, defaults on home mortgages, and credit card payments. Many layoffs followed. It spread globally
Jan 23, 2016 6:24 PM
Answers · 4
As Michael says, if you default you are failing to pay back what you owe (usually, to the bank). If lots of people default then the bank is in trouble too! And if lots of banks are in trouble then the whole country is in trouble.
January 23, 2016
To default on your home mortgage means that you stop paying it back and so the property goes to the bank that gave the buyer the mortgage. Prior to the financial crisis, it was possible for people to buy a house without putting any money down. They borrowed the entire amount. So when the prices fell it no longer made sense for them to continue paying since they no longer had any value in the property. Sometimes they were not able to pay, and sometimes they were. When you default on a mortgage and you are able to pay, that is called a "strategic default".
January 23, 2016
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