Inversion

The fall in mortgage banking in the United States and Puerto Rico is given because the economic crisis of 2008. Crisis where many banks were hit while many people are affected due this big problem that plagues. This problem led to the fall of many banks operating in Puerto Rico, such as Eurobank, Oriental Group, among others. In America there also to the closure of several banks and problems withhigh interest loans and high debts from customers. This has led to problems in both familiar and works as if you have debt on their debts and seek to find the call. Many people are hiding because they cannot pay their mortgages because the crisis around the world.
The causes of economic crises are: first, the recovery will be slow and gradual and subject to numerous risks related largely to thetime taken clean up the balance sheets of banks in several countries; Secondly, the need for new global regulation of the economy poses a major challenge, both regarding correcting structural imbalances (savings and investment) and in terms of financial regulation. Undoubtedly, the financial scenario will not be the same after drastic reduction of stockpiles of wealth throughout the world, theshoulder of liquidity, the increase levels of risk and the adoption of new measures to prevent excessive levels of risk, leverage and opacity financial instruments. As a third point, be important to contain fiscal deficits and growth public debt in many countries of the Organization Cooperation and Development (OECD), which, in turn, affect the financing of the economies in development. Fourth, thecrisis emphasized the role each China's increasingly important role in the global economy. a. One of the main consequences of the crisis has been the sharp contraction in trade world, largely explained by the sharp reduction appropriations for trade and greater sensitivity traded goods relative about the fall of final demand.
The problems in the US residential mortgage market and associated banklosses triggered the turbulence. This box looks at the structure of the US residential mortgage market and the background for the problems. The nominal value of mortgage loans in the US is estimated at about USD 10.2 trillion at end-2006. About 55% of mortgage loans have been packaged into portfolios and furnished as collateral for securities that are sold to investors worldwide. The market forsecurities backed by US residential mortgages is larger than the US government bond market, and accounts for about 10% of the global debt securities market at the end of 2006. The market has grown rapidly in recent years. (See chart 1) shows growth in mortgage-backed securitised debt outstanding in USD billions.
The US mortgage market is divided into different risk classes, where the borrower'scredit score is the main criterion. Borrowers with a credit score that is too low to qualify for a normal (prime) mortgage are classified as sub-prime. Since 2002, sub-prime mortgages have increased markedly in the US and account for a larger share of total mortgages than in other countries. The share of sub-prime mortgages is uncertain. Of securitised mortgages in the US, the share of sub-primeloans is estimated at between 12-15 % of the total nominal value. Of non-securitised mortgages, the share is even more uncertain.
The default rate for this class of loans is much higher than for prime mortgages. Since 1998 the rate has varied between 10-15% (see Chart 2). In the second quarter of 2007, the rate was close 15%. At such a high rate of default, lenders will regularly have to realise thecollateral furnished. As such the market value of sub-prime mortgages is more dependent on collateral value than for normal mortgages. After US house prices started to fall, the market value of these loans decreased markedly.
(See chart 3) shows the breakdown on securitised residential mortgage and bank mortgages in 2006. Securities issued by non-bank mortgage lending institutions, e.g....