Subprime Mortgage Loans Making Comeback

| Jun 29, 2014 | Subprime Lending

An article in today’s New York Times discusses the increase in subprime mortgage lending.  As the article points out, although most of the really bad mortgages that caused the financial crisis were subprime loans, not all subprime loans are bad. People with less than “A” grade credit should be able to get a home loan, too.  The real problems arise when lendors deceive consumers regarding loan terms, gouge them on pricing, or set them up for loans that they can never repay. That is the difference between subprime lending and predatory lending.

“Not all subprime lending is abusive. It just happened that all of the abuses happened in the subprime space,” said Nikitra Bailey, an executive vice president of the Center for Responsible Lending.

 

New York Times: “In Subprime Loans, Subprime Fades as a Dirty Word”