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Can any break down the foreclosure and sub-prime loan issues?

I have to do a project on foreclosures for economic credit and I don't really understand the issues. Can anyone provide a website or article that explains it directly in easy to understand language. Or can someone describe it in easy to understand language in a short paragraph, so that i can understand all the articles and media i have to look at for my project. Thanks...♥

Public Comments

1. research the Community Re-investment Act signed by Clinton. In short it forced Fannie Mae and Freddie Mac to grant loans to borrowers that did not other wise qualify. This brought about hybrid mortgages that were doomed to fail as it let these people qualify for homes they could not afford in the first place. There was a great sub prime market that worked many many years very well. So in order for them to remain viable they too had to make stupid loans to unqualified borrowers. The default rate across the country was .004% on all loans. When these hybrid loans started to recast and reset then people could not keep up with their own stupidity. See some of these loans were say a pick a payment loan. In these notes the borrower had 4 options on how to pay every month. Some of these loans let the borrowers qualify at a short lived intro rate of say 2% then it adjusted in just 4 months to say 4% and held there for many years. The problem is that they could choose every month negative amortization ( less than even interest ) interest only 30 year note and a 15 year note. The Neg am being the least and people thinking that their home would increase in value most took these. Now in 5 years the note recast with the balance jumping since they had not even paid the interest on the loan. These loans absolutely must been recast on the 10th year and then the borrower must start paying down the note on a 20 year schedule. When that happened let's say they had borrowed $100,000 and the negative amortization note monthly was say $400 per month. On the 10th year they now owed $120,000 and the rate recast as well and now their monthly payment with out their taxes and insurances included jumped to $930 per month. People are creatures of habit and they spend their income based on what they thought they owed. So the default rates started to climb and these were Fannie and Freddie loans that were defaulting and alarming rates. Investors who on Wall Street backed these mortgage obligations started pulling their money out of the sub-prime market first as it was a loosing proposition and it caused the well performing sub-prime market to collapse like a house of cards one after another after another. Fannie and Freddie needed the government to bail them out and this all happened while Bush was in office but he had nothing to do with the cause. He just had to save Fannie and Freddie as they were just too big and needed to fail. If they had failed there would only be FHA and other totally government backed loans and that would have been a disaster and thrown us into a deep depression. Mr Clinton said not me Bush's watch but he came to the conclusion when pointed out that he was the culprit in the mess this lending up for the United States. In a nut shell that is what happened. I am a mortgage banker in TN
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