GLOSSARY OF TERMS
The current economic crisis has brought these esoteric terms into mainstream conversation.
| TERMS | | Toxic Debts | | |
Debts that are highly unlikely to be recovered from borrowers. Most lenders expect that some customers cannot repay; toxic debt describes a whole package of loans where it is now unlikely that it will be repaid. Much of the current financial meltdown is a direct result of the failure of the housing market that resulted in heavy losses in Mortgage-Backed Securities. These are the primary debts associated with the term Toxic Debts.
SeeMortgage-Backed Security.
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