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Subprime mortgages — also known as non-prime mortgages — are for borrowers with lower credit scores, typically below 600, that prevent them from being approved for conventional loans.
The American subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the 2007–2008 global financial crisis. The crisis led to a severe economic recession, with millions losing their jobs and many businesses going bankrupt.
One study, by a legal firm which counsels financial services entities on Community Reinvestment Act compliance, found that CRA-covered institutions were less likely to make subprime loans (only 20–25% of all subprime loans), and when they did the interest rates were lower. The banks were half as likely to resell the loans to other parties. [114]
In finance, subprime lending (also referred to as near-prime, subpar, non-prime, and second-chance lending) is the provision of loans to people in the United States who may have difficulty maintaining the repayment schedule. [1]
Leading up to the collapse of the housing market that took place in 2007, Fannie Mae had backed subprime mortgages. Once the market collapsed, it lost millions in defaulted loans; the federal ...
A subprime mortgage is generally a loan that is meant to be offered to prospective borrowers with impaired credit records. The higher interest rate is intended to compensate the lender for ...