Miscellaneous

Timeline of Credit Crisis

(CBS News) The credit crisis began to take hold of the U.S. economy in 2007. Here's a timeline of how we got to where we are right now.

May 17, 2007:
Federal Reserve Chairman Ben Bernanke said growing number of mortgage defaults will not seriously harm the U.S. economy.

Aug. 9, 2007:
Fed pumps $24 billion into U.S. banking system through large purchases of securities, while European Central Bank makes record cash injection of $130 billion into its markets to shake off credit fears. Wall Street suffers its second-worst decline of the year as Dow Jones industrials drop by nearly 400 points.

Aug. 10, 2007:
Fed pumps another $38 billion in temporary reserves into the U.S. financial system; government rejects request for mortgage finance giants Fannie Mae and Freddie Mac to take on more debt.

Aug. 31, 2007:
President Bush announces plan to use Federal Housing Administration, which insures loans for low-income borrowers, to offer government-guaranteed loans to around 80,000 homeowners in default.

Sept. 20, 2007:
Bush acknowledges "some unsettling times" in the housing and credit markets, while Treasury Secretary Henry Paulson signals the administration would consider allowing Fannie and Freddie to temporarily buy loans bigger than the current cap of $417,000.

Dec. 11, 2007
The U.S. Federal Reserve cuts its key interest rate by a quarter-point to 4.25 per cent, the third rate reduction in three months as the central bank tries to keep the country out of a recession. The reduction came as Fed officials signaled that further cuts are possible if a severe downturn in housing and a crisis in mortgage lending get worse.

Jan. 11, 2008
Bank of America Corporation soon will be the nation's biggest mortgage lender and loan servicer. The Charlotte, N.C.-based company announced that it will buy Countrywide Financial for just over $4 billion in stock. The deal rescues the country's biggest mortgage lender and expands the financial services empire of the nation's largest consumer bank.

Jan. 22, 2008
The Federal Reserve's unexpected slashing of a key interest rate by a bold three-quarters of a point appears to be having the desired effect on world markets. The move has sent Asian stocks up after two days of steep losses. Fears of a U.S. recession have battered the region's markets since the start of the year.

Jan. 30, 2008
The Fed cuts a key interest rate for the second time in just over a week, reducing the federal funds rate by a half point. The rate cut marked the fifth time that the Fed has cut the funds rate since Sept. 18 in response to the severe credit crisis which hit global markets in August. The action was expected to be quickly followed by cuts in banks' prime lending rate, the benchmark rate for millions of consumer and business loans.

Feb. 7, 2008
Congress passes an economic stimulus bill and the White House says President Bush will sign it. Rebate checks could start arriving in the homes of Americans in May, averaging $600 to $1,200 for most taxpayers. Disabled veterans, the elderly and other low-income people will get around $300.

March 6, 2008
The Mortgage Bankers Association reports that home foreclosures hit an all-time high in the final quarter of 2007. Meantime, the Federal Reserve says the percent of equity homeowners have in their houses has fallen below 50 percent for the first time since 1945.

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