Many thought the main source of foreclosures during the Great Recession would be

Question

Many thought the main source of foreclosures during the Great Recession would be millions of adjustable rate mortgages (ARMs). The belief was that many holders of subprime ARMs would find themselves unable to meet their monthly payments once mortgages rates reset after the low teaser-rate period. This did not happen to the extent the experts predicted. What is the main reason for this inaccurate prediction?

Select one:

a. Massive government aid to holders of ARMs

b. An uptick in the economy

c. Banks reduced the principle of ARMs

d. Fed's aggressive lowering of interest rates

Explanation / Answer

d. Fed's aggressive lowering of interest rates

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