Question

Angelina has been unemployed for a year. She stopped paying her mortgage six months ago. The bank foreclosed on her home last week. In order to obtain the best possible price for the property, the bank that held her mortgage is going to put the property up for sale in:

Answer 1

Angelina's foreclosure is a result of the housing crisis that contributed to the Great Recession, with declining housing prices leading to widespread defaults as properties' values fell below the mortgaged amounts.

Step-by-step explanation:

The foreclosure mentioned in the question is a direct consequence of the housing crisis that reached a tipping point around 2007, which was part of the broader financial turmoil leading up to the 2008-2009 Great Recession. As housing prices plummeted, many homeowners found themselves with mortgages that were higher than the value of their homes. This phenomenon, often referred to as being 'underwater' on a mortgage, led to widespread defaults and foreclosures. Banks, which had diversified their risks by buying securities based on mortgage loans, found these to be far riskier than anticipated. The crash in housing prices played a pivotal role in weakening the finances of both banks and households.