A bailout is an emergency action taken by the federal government to provide financial assistance to prevent the failure of a specific private or quasi-private entity. This assistance often comes in the form of loans, grants, or government purchase of an equity position.
The Great Recession was a period of significant economic decline lasting from approximately December 2007 through June 2009, marked by a severe financial crisis and elevated unemployment rates.
A Liar Loan is a category of mortgages where borrowers are allowed to state their income and assets without providing any documentation to verify this information. These loans became notorious during the housing boom of the mid-2000s when many borrowers exaggerated their financial standing to qualify for larger loans.
A Qualified Mortgage (QM) is a home loan that adheres to the guidelines set forth in the Dodd-Frank Wall Street Reform and Consumer Protection Act, designed to mitigate the risks associated with mortgage lending and prevent practices that led to the financial crises like the 2008 credit crunch.
The TALF (Term Asset-Backed Securities Loan Facility) is a program created by the Federal Reserve that aims to support the issuance and accessibility of asset-backed securities (ABS) collateralized by underlying consumer and business credit. First introduced during the 2008 financial crisis, TALF seeks to encourage the flow of credit to households and small businesses.
Toxic assets refer to financial assets that have lost most or all of their value and are difficult or impossible to sell due to a lack of functioning market. These assets can significantly harm the balance sheets of institutions that hold them.
