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The boom in mortgage lending, including subprime lending, was also driven by a fast expansion of non-bank independent mortgage originators which despite their smaller share (around 25% in 2002) in the market have contributed to around 50% of the increase in mortgage credit between 2003 and 2005. [114]
The sub-prime market did not take hold in Canada to the extent that it did in ... a bigger share of borrowers began to default in staggering ... Sub-prime lending ...
2002-2006: Fannie Mae and Freddie Mac combined purchases of incorrectly rated AAA subprime mortgage-backed securities rise from $38 billion to $90 billion per year. [76] [77] [78] Lenders began to offer loans to higher-risk borrowers, [79] Subprime mortgages amounted to $600 billion (20%) by 2006. [80] [81] Speculation in residential real ...
The majority of these were prime loans. Sub-prime loans made by CRA-covered institutions constituted a 3% market share of LMI loans in 1998, [279] but in the run-up to the crisis, fully 25% of all subprime lending occurred at CRA-covered institutions and another 25% of subprime loans had some connection with CRA. [280]
Subprime I was smaller in size — in the mid-1990s $30 billion of mortgages constituted "a big year" for subprime lending, by 2005 there were $625 billion in subprime mortgage loans, $507 billion of which were in mortgage backed securities — and was essentially "really high rates for borrowers with bad credit".
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Once you find a subprime mortgage lender, you’ll want to apply as you would for a conventional mortgage. It means you’ll need to supply proof of income via bank statements, W-2s and tax returns.
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]