Subprime Crisis Background Information - Subprime Lending

Subprime Lending

The U.S. Federal Deposit Insurance Corporation (FDIC) has defined subprime borrowers and lending: "The term subprime refers to the credit characteristics of individual borrowers. Subprime borrowers typically have weakened credit histories that include payment delinquencies, and possibly more severe problems such as charge-offs, judgments, and bankruptcies. They may also display reduced repayment capacity as measured by credit scores, debt-to-income ratios, or other criteria that may encompass borrowers with incomplete credit histories. Subprime loans are loans to borrowers displaying one or more of these characteristics at the time of origination or purchase. Such loans have a higher risk of default than loans to prime borrowers." 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.

Read more about this topic:  Subprime Crisis Background Information

Other articles related to "subprime, lending, subprime lending":

Government Policies And The Subprime Mortgage Crisis - Government "affordable Homeownership" Policies - Department of Housing and Urban Development (HUD) - HUD Mandates For Affordable Housing
... This resulted in the agencies purchasing subprime securities ... Until relatively recently, "subprime" was praised by at least some members of the U.S ... Reserve Board, distinguished predatory lending from subprime lending "In understanding the problem, it is particularly important to distinguish ...
Late-2000s Financial Crisis - Background - Subprime Lending
... pressures contributed to an increase in the amount of subprime lending during the years preceding the crisis ... like Fannie Mae played an important role in the expansion of lending, with GSEs eventually relaxing their standards to try to catch up with the private banks ... promotion of thousands of small mortgage brokers, and by their close relationship to subprime loan aggregators such as Countrywide ...
Subprime Crisis Background Information - Subprime Lending
... Insurance Corporation (FDIC) has defined subprime borrowers and lending "The term subprime refers to the credit characteristics of individual borrowers ... Subprime borrowers typically have weakened credit histories that include payment delinquencies, and possibly more severe problems such as charge-offs, judgments, and bankruptcies ... Subprime loans are loans to borrowers displaying one or more of these characteristics at the time of origination or purchase ...
Subprime Mortgage Crisis - Causes - Role of Fannie Mae and Freddie Mac
... The GSEs participated in the expansion of subprime and other risky mortgages, but they followed rather than led Wall Street and other lenders into subprime lending ... Critics claim that HUD encouraged Fannie and Freddie to loosen lending standards, and that the two GSEs had a major role in creating the subprime mortgage crisis ... some analysts estimate that Fannie's market share of subprime mortgage-backed securities issued dropped from a peak of 44% in 2003 to 22% in 2005, before rising to 33% in 2007 ...

Famous quotes containing the word lending:

    If there is among you anyone in need, a member of your community in any of your towns within the land that the LORD your God is giving you, do not be hard-hearted or tight-fisted toward your needy neighbor. You should rather open your hand, willingly lending enough to meet the need, whatever it may be.
    Bible: Hebrew, Deuteronomy 15:7,8.