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Essay / Research Paper Abstract
This 3-page paper focuses on sub-prime mortgages and the market to which these are targeted. The paper also discusses closing points, down payments and potential predatory practices. Bibliography lists 4 sources.
Page Count:
3 pages (~225 words per page)
File: D0_MTsubpri.rtf
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Unformatted sample text from the term paper:
to mar a pristine credit history. If there were problems, the potential homeowner would be forced to explain, in detail, why there was a late credit payment or risk losing
the loan. This was a hardship on people who had poor credit in the past, but were doing their best to turn their financial situations around. All they wanted was
a second chance. But it never seemed to happen that theyd get one. However, as the economic boom of the late 1990s
led to the economic bust of the early 2000s, more and more people were having credit problems, with the numbers of bankruptcies increasing. Yet these people still needed mortgages to
purchase homes. This is how the sub-prime lending market grew. Sub-prime lending, in its most basic form, brings mortgages and credit to
those who have poor credit, no credit or bankruptcy problems (Bankers Online, 2002). "Sub-prime" is a term that is used to describe the credit characteristics of a borrower - and
this can range from borrowers who might have some kind of judgement within the previous two years, borrowers with two or more credit delinquencies during the previous year, bankruptcies within
the past five years, a credit score lower than 660 or even a high debt-to-service ratio (Bankers Online, 2002). The problem with
trying to determine exact interest rates, points or even down payments is that these can vary from state to state, and they also depend on the state of the mortgage
market and economy. However, there are some generalizations we can make when it comes to discussing sub-prime mortgages. First, because borrowers have
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