Question: What is the financial incentive when a home is worth less than the mortgage loan?
Answer: foreclosure

Question: What year did the foreclosure epidemic begin?
Answer: late 2006

Question: What other financial instruments had significant defaults and losses as a result of the crisis expanding from housing to other parts of the economy?
Answer: other loan types

Question: What continues to drain consumer wealth and erode the strength of banks?
Answer: foreclosure epidemic

Question: What institutions comprise the shadow banking system?
Answer: investment banks and hedge funds

Question: What institutions are not subject to the same regulations as commercial banks?
Answer: investment banks and hedge funds

Question: What process caused the financial system to both expand and become fragile?
Answer: financialization

Question: What policy has U.S. Government emphasized from the 1970's onward?
Answer: deregulation

Question: Since the 1970's, what has emphasized deregulation to encourage business, but resulted in less oversight and less disclosure?
Answer: U.S. Government policy

Question: Some regulated banks did not have sufficient financial cushions in place to absorb what losses as a result of the financial crisis of 2007?
Answer: MBS

Question: What was a consequence of the large loan defaults and MBS losses in 2007?
Answer: slowing economic activity

Question: Who provided funds to encourage lending and restore faith in commercial banks in the aftermath of the financial crisis of 2007?
Answer: central banks

Question: Who bailed out key financial institutions and implemented economic stimulus programs as an answer to the financial crisis of 2007?
Answer: Governments

Question: What impacted the ability of financial institutions to lend in the financial crisis of 2007?
Answer: large loan defaults or MBS losses

Question: When did the U.S. Financial Crisis Inquiry Commission report its findings?
Answer: January 2011

Question: What was one of  the conclusions of the U.S. Financial Crisis Inquiry Commission regarding the financial crisis of 2007?
Answer: the crisis was avoidable and was caused by: widespread failures in financial regulation

Question: What agency failed to stem the tide of toxic mortgages contributing to the financial crisis of 2007?
Answer: Federal Reserve

Question: Who was not prepared for the financial crisis in 2007 by lacking a full understanding of the financial system?
Answer: key policy makers

Question: Which business sector contributed to the financial crisis by acting recklessly and taking on too much risk?
Answer: financial firms

Question: What caused mortgage lenders to relax underwriting standards and approve riskier mortgages?
Answer: tough competition

Question: In what year were high underwriting standards relaxed?
Answer: 2003

Question: What years were the worst mortgage loans originated?
Answer: 2004–2007

Question: What years had the most intense competition between securitizers and the lowest market share for GSEs?
Answer: 2004–2007

Question: Who policed mortgage originators and maintained relatively high standards prior to 2003?
Answer: government-sponsored enterprises (GSEs)

Question: How many Democratic appointees wrote the majority report of the Financial Crisis Inquiry Commission?
Answer: six

Question: Who claimed that the GSE never purchased subprime loans - a claim that is widely disputed?
Answer: Paul Krugman

Question: Several reports written by various agencies  concluded that which policy was not the primary cause of the financial crisis?
Answer: government affordable housing policy

Question: According to reports, which loans performed better than some loans securitized by private investment banks?
Answer: GSE loans

Question: How many Republican appointees wrote the minority report of the Financial Crisis Inquiry Commission?
Answer: 4

Question: How many estimated substandard loans did Fannie and Freddie have in 2008? 
Answer: 13 million

Question: What was the value of the estimated 13 million substandard loans held by Fannie and Freddie in 2008?
Answer: over $2 trillion

Question: Which government-sponsored entities had massive risky loan purchases?
Answer: Fannie Mae and Freddie Mac

Question: Peter J. Wallison believes that the one of the roots of the financial crisis can be traced to affordable housing policies by which agency in the 1990s?
Answer: HUD

Question: How many ex-executives of Fannie and Freddie were named in the SEC's December 2011 securities fraud case?
Answer: 6

Question: Who uncovered accounting discrepancies in Fannie Mae and Freddie Mac?
Answer: Office of Federal Housing Enterprise Oversight (OFHEO)

Question: Which administration called for investigation into the soundness of GSEs in the early and mid-2000s?
Answer: Bush administration

Question: On what date did the House Financial Services Committee hold a hearing to assess safety and soundness issues regarding Fannie Mae and Freddie Mac?
Answer: September 10, 2003

Question: What was the result of the House Financial Services Committee on September 10, 2003 regarding Fannie Mae and Freddie Mac?
Answer: The hearings never resulted in new legislation or formal investigation

Question: Who rebuked OFHEO in 2003 for their attempt at regulation of Fannie Mae and Freddie Mac?
Answer: House Financial Services Committee

Question: What was the value of mortgage lending made by Community Reinvestment Act covered lenders to low and mid level income borrowers and neighborhoods from 1993-1998?
Answer: $467 billion

Question: What percent of mortgage lending was made by Community Reinvestment Act covered lenders from 1993 to 1998?
Answer: 10%

Question: What does CRA stand for?
Answer: Community Reinvestment Act

Question: What percent of sub-prime lending occurred at CRA-covered institutions in the run-up to the financial crisis?
Answer: 25%

Question: What percent of sub-prime loans had some connection with CRA in the run-up to the financial crisis?
Answer: 25%

Question: When did CRA make rule changes to relax underwriting standards?
Answer: 1995

Question: How much were CRA loan commitments between 1994 and 2007?
Answer: $4.5 trillion

Question: What was the Federal Reserve's assumption regarding what makes a loan subprime?
Answer: high-interest-rate loans (3 percentage points over average)

Question: How did the Federal Reserve classify CRA loans?
Answer: prime

Question: When were ultra-low interest rates initiated by the Federal Reserve?
Answer: after the terrorist attack on September 11, 2001

Question: What financial innovation enabled investment banks and hedge funds to make large wagers?
Answer: credit default swaps, collateralized debt obligations and synthetic CDOs.

Question: Credit default swaps, collateralized debt obligations and CDOS are all types of what?
Answer: derivatives

Question: Which magazine had an article where Michael Lewis spoke with a trader about bad loans?
Answer: Portfolio Magazine

Question: What financial innovation allows investment banks and hedge banks to make large wagers?
Answer: derivatives

Question: What are some names of derivatives?
Answer: credit default swaps, collateralized debt obligations and synthetic CDOs

Question: Peter J. Wallison believes that the huge number of these loans led to the financial crisis?
Answer: substandard

Question: What type downpayments do substandard loans generally have?
Answer: low or no downpayments

Question: According to Peter J. Wallison, why did the U.S. residential housing bubble led to financial crisis?
Answer: it was supported by a huge number of substandard loans

Question: Other countries had large residential housing bubbles that deflated during what years?
Answer: 1997–2007

Question: Peter J. Wallison's conclusions regarding the financial crisis are not in agreement with this economist's views?
Answer: Krugman

Question: How many Miles East of Puerto Rico is St. Barts?
Answer: 160