Ask your parents how the 2008 financial crisis affected or changed their lives. For me, I was a communications consultant, paid by contract and billable hours, and my wife was a teacher at a community college, paid by the course and by the hour as a tutor. Suddenly, my clients told me that their donations or income or revenue had stopped, and they would not be able to pay me on time. They owed me more than $10,000 and would take six months to pay me. My wife’s classes at the community college were cut in half because students could not afford to pay for classes. We were drawing on savings to survive each month and pay our mortgage. Bank of America sent us a note saying, in this difficult time, we could probably get a loan modification for our mortgage, so don’t worry if we’re not able to pay for months. This turned out to be a terrible, stressful, terrifying financial trap that took three years to emerge from — we almost lost our house and all the equity we had in it — but fortunately we saved it by moving abroad to a country that was not experiencing the financial crisis that the United States was undergoing.
My wife secured a job teaching English as a Second Language at a university in the country of Turkey, and after a month, suggested that I and my son join her. We did, I was quickly hired as an English instructor, and our son, age 12, attended a Turkish school part-time and engaged in remote or distance learning for the school year. Living in Turkey was a wonderful experience. More about our travels, and experiences living abroad for eight years.
In short, we were able to secure a loan while working abroad for the back-due mortgage payments. The so-called “loan modification” from Bank of America never materialized due to appalling incompetence. The bank refused our payments, accused us of default and attempted to foreclose. Yet unlike thousands if not millions of homeowners who were abused by banks such as Countrywide, Wells Fargo and BOA, we saved our home and ultimately paid off the mortgage. But it took my family three years to recover from the 2008 financial crisis.
This is a long way of introducing this Crash Course video about the 2008 Financial Crisis.
Crash Course Economics: “Adriene and Jacob talk about the 2008 financial crisis and the US Goverment’s response to the troubles. So, all this starts with home mortgages, and the use of mortgages as an investment instrument. For years, it seemed like the US housing market would go up and up. Like a bubble or something. It turns out it was a bubble. But not the good kind. And the government response was…interesting. Anyway, why are you reading this? Watch the video!” Transcript.
More Financial Crisis Resources:
Financial Crisis Inquiry Report: http://www.gpo.gov/fdsys/pkg/GPO-FCIC…
TAL: Giant Pool of Money: http://www.thisamericanlife.org/radio…
Timeline of the crisis: https://www.stlouisfed.org/financial-…
deregulation in the financial industry.
Credit ratings agencies
Predatory lending practices
Adjustable rate mortgages
Collateralized debt obligations
Supply and demand in real estate
credit default swaps
Stock market crash
2009 $800 billion stimulus
Dodd-Frank Financial Reform
consumer protection bureau
Too big to fail
Are markets “self-correcting”?