Today we will be beginning the movie the Inside Job. Among the many awards this movie has received, perhaps its highest honer was an Academy Award for best Documentary Feature. The movie does a fantastic job of showing the collapse of both the financial system in the US and around the world. One of the most important factors in this collapse was the home mortgage industry. For today's post, please respond to the following questions:
What is a loan? Do you know anyone who has borrowed money to buy a house? Who lent them the money? Did the borrower have to make a down-payment? Why?
In addition, it is important to know that if a borrower has a bade credit history, as about 1 in 4 peoples do, then their loan is known as a "sub-prime" mortgage. Why would a bank even consider making a sub-prime loan?
With a little background on the issue above, you should have a solid footing in understanding the concepts of this video! I hope you enjoy, it is a fantastic movie - one of my very favorite documentaries of all time.
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