Summary of the Credit Crisis - Before and After

Helloo guys.

This blog post is going to be a bit different than my preceding ones. We, my fellow students and myself, were asked by one of our English teachers to blog about a summary we recently wrote. There is a first version of the summary and a corrected one. I marked the mistakes corrected by my teacher in different colors. I hope it doesn't look too confusing. If so, feel free to ask questions any time. Here we gooo.

First Version

 

The video The Crisis of Credit Visualized covers the origins of 2008’s credit crisis and its impact on the economy. The crisis is defined as a “worldwide financial fiasco” which caused the credit market to freeze in 2008.

A homeowner mortgages their house, i.e. they borrow money and pay back a monthly mortgage payment. This payment is received from investors who are seeking for investments where they can make more money. Investors borrow money in order to amplify potential gains. This is called leverage. The investor can choose between risky and safe mortgages. Safe mortgages have a low rate of return, while risky ones have a higher one.  This is called a collateralized debt obligation. In order to make safe mortgages even safer, banks insure the mortgages with a fee called the credit default swap.

When a homeowner defaults, the house comes into the lender’s possession. The lender then gives the house to less solvent people or sells it again. Putting more houses on sale creates more supply than demand. Consequently, housing prices fall. The investors invest in worthless houses and cannot pay back their loans. This leads to a frozen credit market where no one buys or sells anymore.

Author is missing
Not only does it cover its origins, but explains the crisis as a whole
It's not really a definition
Too wordy
Preposition
Wordy - use an adjective that describes "investments"
Wordy - there is a shorter way to say this
Wrong word
Delete
Focus a bit more on sub-prime mortgages
Tense

 

Corrected Version

The video The Crisis of Credit Visualized by Jonathan Jarvis explains the 2008’s credit crisis and its impact on the economy. The crisis is called a “worldwide financial fiasco” which caused the credit market to freeze in 2008.

When a house is mortgaged, its homeowner pays back a monthly mortgage payment. The investors receiving these payments can choose between mortgages of a lower or higher rate of return. This is called a collateralized debt obligation. In order to make low-return mortgages safer for investors, the mortgages are insured with a fee called the credit default swap.

When a homeowner defaults, the house comes into the lender’s possession. Normally, the lender sells it to another responsible homeowner. These are called prime mortgages. What occurred ahead of the credit crisis, however, was the divestment of mortgages to less solvent people, not requiring down payments or a proof of income. These are called sub-prime mortgages. If more sub-prime mortgages default, more houses are on sale. The abundant supply of houses causes their prices to fall. The investors invest in worthless houses and cannot pay back their loans, which they need to do to amplify potential gains. This lead to 2008’s frozen credit market.