The Washington Post, September 10, 2018: Lehman Bros.’ bankruptcy a decade ago offers lessons to protect today’s consumers
The bankruptcy filing of Lehman Bros. 10 years ago this month signaled that an already weak economy was in deep trouble.
Caught in the storm were homeowners who found themselves underwater on their mortgages. The stock market plunged, leaving investors frightened about losses in their retirement savings. And the economic collapse exposed how badly people were weighed down by debt.
What follows are observations from financial, housing and consumer experts on what happened and how people can protect themselves before the next economic crisis hits.
An observation on the impact of the financial crisis on homeowners, investors and consumers noted by Jesse Van Tol, CEO of the National Community Reinvestment Coalition states: “If you were a homeowner during the Great Recession, then almost all your wealth was in your home. For the black community — the most targeted for subprime mortgages — the foreclosure crisis sank the rate of black homeownership to just over 40 percent. That’s a 50-year low and pretty much unchanged from the homeownership rate before the civil rights movement. Homeownership is the foundation of wealth building in America. Without it, the racial wealth gap is growing.”
Many experts are already warning another financial crisis is inevitable. But if you study the past, you’ll have a better chance of weathering the next storm.
