Extraordinary Genius

At that time, the market for mortgage finance companies in the United States had shown some crisis, but it had been dissolved by the political axe of the United States. How did they dissolve it? Easy, adjust the interest rate.

Beginning last year, the Fed has been constantly adjusting interest rates and rising. It went up from one percent to five and a half percent.

Rising interest rates mean rising incomes for these mortgage finance companies and rising bank mortgage revenues, but pressure has multiplied for those who repay their loans.

The interest rate on loans, which is normally higher than the deposit rate, is also one of the main sources of bank revenues, absorption and lending.

And what does rising interest rates mean? It means those who would have been able to repay their mortgages normally can't afford it now.

The involvement of mortgage finance companies has given many Americans the opportunity to buy houses, allowing them to borrow money to buy houses even if they have insufficient credit and are worried about their ability to repay.

Another model is that monthly repayments of principal are the same, but interest is adjusted as the bank adjusts.

In the case of a few times higher bank interest rates, many people would have to pay a few times higher interest rates, which greatly increases their burden.

Some people who could afford to pay off their loans are not paying off. Once home prices rose so fast that even if these people couldn't afford to pay off their loans, the company could auction the house without loss and customers without loss.

But now house prices are rising fast without interest, which means customers are losing money now, and mortgage finance companies are losing money.

It was also in this context that the US government axe decided to let the Fed cut interest rates. While the Fed is not a political axe, it does have some influence.

Unfortunately, it was all too late, and many loans had become bad debts.

As the second subprime lending company in the United States, the New Century Finance Corporation, too many loans were granted. Moreover, for the sake of efficiency, they have granted loans to many people who would otherwise not have met the requirements at all, and some of the collateral has even been repetitive.

Many people's income situation should not have been successful at all. You earn a thousand dollars a month, repay more than 900 dollars, and there seems to be plenty of money left, but normal loans require more than double the repayment amount to be safer. And the rest of the money needs to be enough for each other to live.

How do you live with dozens of dollars left in a month? Don't say it's in a highly developed country like the US, even in some countries with the average economy, it's not enough, prices are there.

And a lot of people don't get paid, and the new century finance companies came up with a "good way” to change the lending model. Loan options could be re-elected, and repayment modalities would naturally change. That would solve the problem of many people having difficulty repaying their debts.

But this is just a cure, not a cure, even a drink to quench thirst. As a result, new century financial companies are losing more money.

The New Century Finance Corporation, also a very fast-growing company, was founded in 1995 and was listed in '97. The US side was hit again by the collapse of the real estate bubble that affected the world in' 98, especially on the Asian side.

But in the new century, financial firms were not large enough to successfully avoid this risk, and then they grew faster.

When Xiaobu X came up with this housing scheme, most real estate finance companies were growing rapidly, and the share prices of many companies were rising rapidly.

But in 02, Feng Yu triggered the network bubble on the US side beforehand, especially uncovering the false ~ accounting methods of Shitong, Enron and other companies, so that the entire US stock market, even the global stock market, was severely damaged, hasn't slowed down for several years.

At that time, financial companies were growing faster in the new century. But it was also at that time that the two-room group had a fake ~ account scandal.

But interestingly, the scandal of the two housing groups is not that they misrepresent profits as high, but that they misrepresent profits!

At that time, real estate profits were very high, and the two housing groups made a lot of money. However, the two companies concealed many profits for a number of reasons, including low payments and lower taxes.

This sends a signal to a lot of people that the real estate finance industry is making too much money right now. After hiding profits, it's making so much money. And so more and more people started going into real estate finance, trying to make a little more money.

It was also at this time that the share price of the new century finance company inevitably declined, but the decision makers of the company believed that the market underestimated their share price and then, together with several of the same subprime lending companies, turned them into real estate investment trusts, hoping to attract more investors with higher dividends.

Simply put, this new century finance company doesn't have much money.

But they were more inclined to lend, and the scrutiny was very low, and even scrutiny was a way to get them to lend, quickly expand, and seemingly very prosperous.

Bank lending, you go to the bank, and most of it needs to be queued, and you have to review something, which is very complicated. But in the New World Finance Corporation, these processes are not needed at all.

They use brokers, many of whom don't even have offices, to work in their own homes, and with just one phone call, brokers come to the door, which is much more considerate than the bank looks.

And the same is true of the New Century Finance Corporation, which has grown rapidly to become the second-largest subprime mortgage lending company in the United States, with a market value soaring from $1 million to over $3 billion in more than a decade!

The company is also very relaxed for brokers, many of whom take paid leave for up to six months and even include many executives.

Under this operation, the hidden dangers of financial companies in the new century are increasing. Many people are simply cheating ~ lending, and the company's bad debts and bad debts are increasing.

The company's financial auditors have long found these problems, but they have also always chosen to hide them. Once the shareholders know that the company has lost so much, the company is doomed.

Such a financial lending company should have sufficient cash reserves, but it does not. So as long as the message is released, the result is doomed.

Feng Yu looked at the information Ralph had given him and did not expect the company to lose more money than he thought. And it's not just the new century finance companies, it's the same companies, it's a lot of them, it's pretty much the same.

Feng Yu put the file down: “Ralph, tell them the plan can start! ”

……

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