Falling prices also resulted in homes worth less than the mortgage loan, providing a financial incentive to enter foreclosure. The ongoing foreclosure epidemic that began in late 2006 in the U.S. continues to drain wealth from consumers and erodes the financial strength of banking institutions. Defaults and losses on other loan types also increased significantly as the crisis expanded from the housing market to other parts of the economy. Total losses are estimated in the trillions of U.S. dollars globally. COUNT 5
QSN1 How much are total losses estimated to be from falling home prices? ANS1 trillions of U.S. dollars QSN2 What is the financial incentive when a home is worth less than the mortgage loan? ANS2 foreclosure QSN3 What year did the foreclosure epidemic begin? ANS3 late 2006 QSN4 What other financial instruments had significant defaults and losses as a result of the crisis expanding from housing to other parts of the economy? ANS4 other loan types QSN5 What continues to drain consumer wealth and erode the strength of banks? ANS5 foreclosure epidemic