how come people lost their homes and became homeless due to the lehman failure

Answer 1

The collapse of Lehman Brothers in 2008 triggered a global financial crisis that led to a severe economic recession. This crisis had far-reaching effects on many parts of the economy, including the housing market. Many individuals lost their homes and became homeless due to the Lehman failure for the following reasons:

1. Subprime mortgages: Banks, including Lehman Brothers, were heavily invested in subprime mortgages - loans given to individuals with poor credit histories. When these loans began to default, the housing market crashed.

2. Foreclosures: As a result of the housing market crash, many individuals were unable to pay their mortgage payments, and their homes went into foreclosure.

3. Unemployment: The recession that followed the Lehman collapse led to high levels of unemployment. Many people lost their jobs and were unable to make their mortgage payments, further exacerbating the foreclosure crisis.

4. Financial instability: The financial crisis and the resulting instability made it difficult for people to access credit or refinance their homes, making it hard for them to avoid foreclosure.

In summary, the collapse of Lehman Brothers contributed significantly to the housing crisis and the subsequent wave of foreclosures, which led to many people losing their homes and becoming homeless.