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Lesson 7

To build on our knowledge about mortgages and how they have affected homeownership, we will learn how predatory lending and the overreliance on subprime mortgages led to the 2008 global economic collapse. We will then develop our close reading skills by analyzing central claims, main-idea topic sentences, and supporting information in an article about the mortgage crisis and recession written by a member of the Federal Reserve System.

Lesson Goals

  • Can I understand home mortgage-related concepts such as fixed and adjustable rates and subprime mortgages?

  • Can I analyze the claims and supporting evidence presented in informational videos and texts about the subprime mortgage crisis and its relationship to the US housing industry?

Texts

Optional

  • Digital Access
    • “Subprime Mortgage Crisis,” John V. Duca, Federal Reserve History, 2013

Materials

Tools

Reference Guides

Question Sets

Editable Google Docs

Activity 1: Read – Write

We will read and analyze an informational article from the federal reserve system, “Subprime Mortgage Crisis.”

Read "Subprime Mortgage Crisis" from federalreservehistory.org, identifying and annotating informational claims about the mortgage crisis that are presented in the article to explain its initial claim in the subheading, as listed below:

The expansion of mortgages to high-risk borrowers, coupled with rising house prices, contributed to a period of turmoil in financial markets that lasted from 2007 to 2010.

Activity 2: Read – Discuss

As a class, we will analyze the central claim and main ideas of an informational article from the federal reserve system about the subprime mortgage crisis.

Follow along and participate as your teacher models interpreting and paraphrasing the following central claim that begins the "Subprime Mortgage Crisis" article:

The expansion of mortgages to high-risk borrowers, coupled with rising house prices, contributed to a period of turmoil in financial markets that lasted from 2007 to 2010.

Identify and highlight the claims that are presented to develop the article’s central claim in the section How and Why the Crisis Occurred.

Participate in a class discussion in which you practice interpreting and paraphrasing the claims of the article.

Activity 3: Read

We will individually identify evidence presented by the author in developing one of the article’s main-idea topic sentences.

For one of the first section’s topic sentences that is assigned to you, read and analyze the paragraph that explains and develops its main idea while considering the following guiding question:

  1. What information and explanatory details does the author offer to develop the idea presented in your assigned topic sentence?

Activity 4: Discuss

We will discuss what we have learned from the federal reserve system article about the subprime mortgage crisis of 2007–2010 and its impact on homeownership and the economy in the us.

As the class moves through a summarization of the main ideas presented in "Subprime Mortgage Crisis," share and explain what you have identified as supporting evidence for each of the first section’s seven topic sentence claims.

In a class discussion, connect and compare the information and understanding you gained from analyzing the article with what you learned from watching the video "The Crisis of Credit Visualized."

Activity 5: Write

We will each write a paragraph in our Learning Logs or Vocabulary Journals that summarizes what happened during the subprime mortgage crisis.

Following the class discussion, write a paragraph summarizing what caused the subprime mortgage crisis of 2007-2010 and the Great Recession and what the effects were of that worldwide economic recession. In your summary, use as many of the following vocabulary words from your Vocabulary Journal as you can to explain what happened:

  • mortgage

  • debt

  • foreclosure

  • amortization

  • equity

  • interest rate

  • fixed-rate mortgage

  • adjustable-rate mortgages

  • subprime mortgage