What is the deal with all I’ve been hearing on these “subprime” lenders and their problems?
Recently, the past few years caught up with the mortgage industry, particularly in the area of higher credit risk borrowers. It had gotten to the point where almost anyone breathing, no matter what the credit score or credit risk, could get a mortgage loan. Most of these were done on some sort of A.R.M., and when the first adjustment rolled around after a couple of years, defaults started soaring, lenders started rethinking their policies, people started panicking…. This caused most of these high risk lenders to go out of business overnight, leaving many other people holding the bag and many borrowers who could have gotten mortgage financing three months ago unable to find financing. Basically, the whole subprime mortgage industry stopped on a dime. We believe it may get worse before it gets better, but that it will get better at some point as the lending industry is all about making loans.
