There were days when lenders handed out mortgages without requiring documentation and down payments. Now these lenders of subprime call the loans ’nonprime’ and require as much as 30 percent down payment to safeguard their investment. And they see a big opportunity for growth as tougher federal lending standards shut out millions of Americans with poor credit from the mortgage market. There needs to be a solution for people who don’t fit the bill for them nonprime lending is the only option.
The current level of subprime lending is small compared with the flood that helped spur the housing boom. The loans are made to the riskiest borrowers, with low credit scores, high levels of debt and inconsistent income.About $3 billion of subprime mortgages were made in the first nine months of 2013, matching the year-earlier period, according to Inside Mortgage Finance, a trade journal. In 2005, subprime loans reached $625 billion.
The current level of subprime lending is small compared with the flood that helped spur the housing boom. The loans are made to the riskiest borrowers, with low credit scores, high levels of debt and inconsistent income.About $3 billion of subprime mortgages were made in the first nine months of 2013, matching the year-earlier period, according to Inside Mortgage Finance, a trade journal. In 2005, subprime loans reached $625 billion.