Loan Modification - Sub-Prime Lending Crisis

We all know that Sub-prime lending crisis was mainly due to the Major U.S. Banks. Now these major banks are getting billion of dollars in aid. According to a study these sub-prime lenders, who are responsible for the 2002 - 2006 housing boom, were provided with huge aid by big American banks.

These sub-prime lenders either gone bankrupt or been acquired by larger financial institutions during the housing crisis. But the parent companies of these lenders have received around $700 billion as government aid.

According to an investigative research firm, the financial crisis was not unforeseen. Executive director of the research firm added that these banks were solely responsible for sub-prime lending which ultimately poisoned the U.S. and global financial markets.

A good example is that of sub-prime lender New Century Financial Corp., whose high-cost lending schemes brought in more than $75 billion from 2005 to 2007. According to a research this company was backed by major American Banks including - Bank of America, Morgan Stanley and Goldman Sachs. Out of these three major banks Bank of America recently got a $25 billion financial aid, whereas other two banks have also received $10 billion aid from the Government.

The Center for Public Integrity, aims to make the report a primer for better understanding the cause of the current crisis.

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