Title: Video: (CU5 M3) Crisis of Credit
Course: SkillsCom BA 101 16.0 > Section: Credit Unit 5 Module 3

There are a lot of factors that contributed to why the financial crisis leading to the recent major recession occurred. One simplified explanation is that there was a housing bubble that led both banks and homeowners to think that home values would continue to increase more than they did. An increased amount of buyers purchased homes and more banks though it was a safe investment to give mortgages to these people. As more buyers entered the market, home prices got pushed even higher, but it couldn't last and eventually something had to give.

Since the collapse, there's been a lot of finger pointing. Homeowner's blaming banks for predatory lending practices, and banks blaming homeowners for irresponsibly taking on more debt than they should have. The fact is, the whole system was flawed.

If you're interested in hearing more about the financial crisis explained in an easy to understand way, it is recommend that you check out This American Life's - The Giant Pool of Money podcast produced in 2008, while things were still unfolding. It's not required for this class, but it's an interesting listen.