Securities Fallout From The Subprime Lending Crisis
In the last few years, lenders have made increasing numbers of mortgage loans to borrowers with poor credit histories. Many of these loans, typically called subprime loans, require little or no down payment and little documentation of the borrower’s financial condition. Many have features that cause monthly debt service payments to increase over time.
Some estimate that subprime loans account for approximately 20% of the $3 trillion mortgage market. Much of this growth has been fueled by the liquidity provided by the securitization...
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