Ads
related to: subprime refinance risks and costs of livinglendgo.com has been visited by 10K+ users in the past month
trustedhippo.com has been visited by 100K+ users in the past month
assistantmagic.com has been visited by 10K+ users in the past month
Search results
Results from the WOW.Com Content Network
Subprime loans have a higher risk of default than loans to prime borrowers. [108] If a borrower is delinquent in making timely mortgage payments to the loan servicer (a bank or other financial firm), the lender may take possession of the property, in a process called foreclosure .
There is also risk of inflation and devaluation of the currency. [19] Critics have argued that worthy borrowers can still get credit and that credit easing (and government intervention more generally) is really an attempt to maintain a debt-driven standard of living that was unsustainable.
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]
Expensive: Compared to conventional loans, subprime mortgages have considerably higher interest rates, which increases your all-in costs. You’ll likely need to come up with a hefty down payment ...
A new “zero-down” mortgage purchase program has sparked concern within the industry, due to similarities with the disastrous subprime loans that contributed to the 2008 housing market crash. (AP)
These loans are characterized by higher interest rates, poor quality collateral, and less favorable terms in order to compensate for higher credit risk. [3] During the early to mid-2000s, many subprime loans were packaged into mortgage-backed securities (MBS) and ultimately defaulted, contributing to the financial crisis of 2007–2008. [4]
Ads
related to: subprime refinance risks and costs of livinglendgo.com has been visited by 10K+ users in the past month
trustedhippo.com has been visited by 100K+ users in the past month
assistantmagic.com has been visited by 10K+ users in the past month