How People Are Trapped In Subprime Loans In US

Subprime lending was one of the rapidly growing sections of mortgage market and lenders provided scope of home ownership to those who were not able to qualify for conventional loans. But collapse of numerous subprime lending institutions & increasing rate of delinquency among borrowers has raised concerns about the abusive lending practices that some subprime lenders are engaged in.

Subprime Mortgage Lending - What's Good About It?

In recent months, the media would lead us to believe that the risks and damages possible in subprime lending have ruined everyone who has chosen this kind of mortgage. While there have, indeed, been many catastrophes in this area, not all cases of subprime lending fall into this category. Some subprime lending benefits do exist.

Subprime Mortgage Lending - What Are Its Effects?

Subprime lending is really nothing new. It was originally designed to enable people with less-than-sterling FICO scores to purchase homes, cars, and other items for which they couldn't get conventional loans. Also known as "second chance" lending, its purpose was to provide responsible individuals with a second chance to become homeowners.

What is Subprime Loan

A subprime loan is a mortgage loan that is made to an individual with poor or bad credit. These are typically individuals that would have poor credit scores of 620 and below.

Because of their poor credit scores, subprime borrowers do not qualify for traditional loans or government loans such as FHA and VA loans. And currently, subprime loans represent 15% to 25% of the total mortgage market.