Subprime lending - Wikipedia, the free encyclopedia http://en.wikipedia.

org/wiki/Subprime

Subprime lending
From Wikipedia, the free encyclopedia
(Redirected from Subprime)

Subprime lending (also known as B-paper, near-prime, or second chance lending) is the practice of making loans to
borrowers who do not qualify for the best market interest rates because of their deficient credit history. The phrase also
refers to banknotes taken on property that cannot be sold on the primary market, including loans on certain types of
investment properties and certain types of self-employed persons.

Subprime lending is risky for both lenders and borrowers due to the combination of high interest rates, poor credit
history, and adverse financial situations usually associated with subprime applicants. A subprime loan is offered at a rate
higher than A-paper loans due to the increased risk. Subprime lending encompasses a variety of credit instruments,
including subprime mortgages, subprime car loans, and subprime credit cards, among others. The term "subprime" refers
to the credit status of the borrower (being less than ideal), not the interest rate on the loan itself.

Subprime lending is highly controversial. Opponents have alleged that subprime lenders have engaged in predatory
lending practices such as deliberately lending to borrowers who could never meet the terms of their loans, thus leading to
default, seizure of collateral, and foreclosure. There have also been charges of mortgage discrimination on the basis of
race.[1] Proponents of subprime lending maintain that the practice extends credit to people who would otherwise not have
access to the credit market.[2]

The controversy surrounding subprime lending has expanded as the result of an ongoing lending and credit crisis both in
the subprime industry, and in the greater financial markets which began in the United States. This phenomenon has been
described as a financial contagion which has led to a restriction on the availability of credit in world financial markets.
Hundreds of thousands of borrowers have been forced to default and several major American subprime lenders have filed
for bankruptcy.

Contents
1 Background
2 Definition
2.1 Subprime lenders
2.2 Subprime borrowers
3 Types
3.1 Subprime Origination, Securitization and Servicing
3.2 Subprime mortgages
3.3 Subprime credit cards
4 Proponents
5 Criticism
5.1 Mortgage discrimination
6 U.S. subprime mortgage crisis
7 See also
8 References
9 External links

Background

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Subprime lending evolved with the realization of a demand in the marketplace and businesses providing a supply to meet
it. With bankruptcies and consumer proposals being widely accessible, a constantly fluctuating economic environment,
and consumer debt loan on the rise, traditional lenders are more cautious and have been turning away a record number of
potential customers. Statistically, approximately 25% of the population of the United States falls into this category.

In the third quarter of 2007, Subprime ARMs only represented 6.8% of the mortgages outstanding in the US, yet they
represented 43.0% of the foreclosures started. Subprime fixed mortgages represented 6.3% of outstanding loans and
12.0% of the foreclosures started in the same period.[3]

American Dialect Society voted subprime the Word of the year for 2007 on January 04, 2008. [4]

Definition
While there is no official credit profile that describes a subprime borrower, most in the United States have a credit score
below 723.[5] Fannie Mae has lending guidelines for what it considers to be "prime" borrowers on conforming loans.
Their standard provides a good comparison between those who are "prime borrowers" and those who are "subprime
borrowers." Prime borrowers have a credit score above 620 (credit scores are between 350 and 850 with a median in the
U.S. of 678 and a mean of 723), a debt-to-income ratio (DTI) no greater than 75% (meaning that no more than 75% of net
income pays for housing and other debt), and a combined loan to value ratio of 90%, meaning that the borrower is paying
a 10% downpayment. Any borrower seeking a loan with less than those criteria is a subprime borrower by Fannie Mae
standards.

Subprime lenders

To access this increasing market, lenders often take on risks associated with lending to people with poor credit ratings.
Subprime loans are considered to carry a far greater risk for the lender due to the aforementioned credit risk
characteristics of the typical subprime borrower. Lenders use a variety of methods to offset these risks. In the case of
many subprime loans, this risk is offset with a higher interest rate. In the case of subprime credit cards, a subprime
customer may be charged higher late fees, higher over limit fees, yearly fees, or up front fees for the card. Subprime
credit card customers, unlike prime credit card customers, are generally not given a "grace period" to pay late. These late
fees are then charged to the account, which may drive the customer over their credit limit, resulting in over limit fees.
Thus the fees compound, resulting in higher returns for the lenders. These increased fees compound the difficulty of the
mortgage for the subprime borrower, who is defined as such by their unsuitability for credit.

Subprime borrowers

Subprime offers an opportunity for borrowers with a less than ideal credit record to gain access to credit. Borrowers may
use this credit to purchase homes, or in the case of a cash out refinance, finance other forms of spending such as
purchasing a car, paying for living expenses, remodeling a home, or even paying down on a high interest credit card.
However, due to the risk profile of the subprime borrower, this access to credit comes at the price of higher interest rates.
On a more positive note, subprime lending (and mortgages in particular), provide a method of "credit repair"; if
borrowers maintain a good payment record, they should be able to refinance back onto mainstream rates after a period of
time. Credit repair usually takes twelve months to achieve; however, in the UK, most subprime mortgages have a two or
three-year tie-in, and borrowers may face additional charges for replacing their mortgages before the tie-in has expired.

Generally, subprime borrowers will display a range of credit risk characteristics that may include one or more of the
following:

Two or more loan payments paid past 30 days due in the last 12 months, or one or more loan payments paid past 90
days due the last 36 months;
Judgment, foreclosure, repossession, or non-payment of a loan in the prior 48 months;
Bankruptcy in the last 7 years;

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Relatively high default probability as evidenced by, for example, a credit bureau risk score (FICO) of less than 620
(depending on the product/collateral), or other bureau or proprietary scores with an equivalent default probability
likelihood.

Types
Subprime Origination, Securitization and Servicing

Subprime Originators are mortgage brokers who sell high-risk residential or commercial loans with a variety of gimmicks
to trap low income borrowers into loans with increasing yield terms that eventually exceed borrower’s capability to make
the payments for the sole purpose of selling these loans to major financial institutions which in turn sell these loans to
REMIC Trusts they form for issuing bonds, securities and other investment vehicles for resale to pension funds and other
fixed income investors.

These Mortgage Originators are owned or controlled by major financial institutions which provide a “Warehouse” line
for their lending. For example, First Franklin was owned by [[Merrill Lynch] and WMC was owned by GE. The
Residential Mortgages are sold to Residential Mortgage Backed Securities (RMBS) and Commercial Mortgages are
bundled into Commercial Mortgage Backed Securities (CMBS). RMBS loans are insured by GSE issuing the certificates
and in turn the securities are insured by bond insurers. Commercial mortgages carry the “Depositor” warranty by a
Mortgage Loan Purchase Agreement (MLPA) registered with the SEC as part of securitization registration.

These financial institutions then remain in control of these loans as “Trustee”, “Servicers” and “Controlling Class” of the
REMIC trusts in hopes of deriving significant fees and other income from management of Taxes, Insurance and Repair
Reserve Funds required by the terms of these mortgages. Should these loans default, the Servicing is passed to “Special
Servicers” who stand to reap significant “Workout”, “Foreclosures” and REO management fees. The Special Servicers
are directed by “Directing Class” or “Controlling Class” which comprise of majority holders of the lowest class of
REMIC Trust securities also referred to as “[[First Loss]” or “B-Piece” holders.

Upon liquidation of foreclosed assets or” mortgage collateral” usually at a Sheriff auction, the Special Servicer purchases
the collateral for a dollar over the highest bidder, at a fraction of the original Mortgage loan. The difference between the
foreclosure sale and the note amount is referred to as shortfall and becomes a liability of the Borrower and Guarantors.
This shortfall continues to accumulate interest at default rates which form additional “Servicing Income”. The various
fees and income generated from servicing these loans form the basis of FASB MSR which is booked as an asset by these
financial institutions thus driving up the corporate equities, shareholders values and management bonuses!

The shortfall of loan repayment is usually repaid as a result of ”Repurchase Demand” by Special Servicer on GSE or loan
seller to REMIC Trust also called “Loan Depositor”. The purchased collateral at auctions by Special Servicers are
referred to as REO properties which then can be marketed and sold for market value. Special Servicers usually keep the
“Upside” or difference between auction price and market sale of the collateral. These foreclosure fees and REO income
form a major incentive for Servicers to purchase the “Servicing Rights” of the REMIC trusts from Trustees who have the
authority to replace Servicers. It is not uncommon for a predatory Servicer to pay millions of dollars to procure the
“Servicing Rights” of the REMIC trusts in hopes of successful foreclosures and equity stripping from Borrowers,
Guarantors, Loan Sellers and Investors.

REMIC Trusts are “Passive” or “Pass-Through” Entities under the IRS code and are not taxed at trust level. However, the
bond-holders are expected to be taxpaying entities and are taxed on interest income distributed by the REMIC trusts.
REMIC trusts are forbidden from any other business activities and are taxed 100% on any other income they may
generate which is referred to as “Prohibited Income” under IRC 860 Code.

Subprime mortgages

As with subprime lending in general, subprime mortgages are usually defined by the type of consumer to which they are
made available. According to the U.S. Department of Treasury guidelines issued in 2001, "Subprime borrowers typically
have weakened credit histories that include payment deliquencies, and possibly more severe problems such as

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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."

In addition, many subprime mortgages have been made to borrowers who lack legal immigration status in the United
States [1] (http://www.boston.com/news/local/articles/2007/09/18/quietly_living_american_dream/)

Subprime mortgage loans are riskier loans in that they are made to borrowers unable to qualify under traditional, more
stringent criteria due to a limited or blemished credit history. Subprime borrowers are generally defined as individuals
with limited income or having FICO credit scores below 620 on a scale that ranges from 300 to 850. Subprime mortgage
loans have a much higher rate of default than prime mortgage loans and are priced based on the risk assumed by the
lender.

Although most home loans do not fall into this category, subprime mortgages proliferated in the early part of the 21st
Century. About 21 percent of all mortgage originations from 2004 through 2006 were subprime, up from 9 percent from
1996 through 2004, says John Lonski, chief economist for Moody's Investors Service. Subprime mortgages totaled $600
billion in 2006, accounting for about one-fifth of the U.S. home loan market.

There are many different kinds of subprime mortgages, including:

interest-only mortgages, which allow borrowers to pay only interest for a period of time (typically 5–10 years);
"pick a payment" loans, for which borrowers choose their monthly payment (full payment, interest only, or a
minimum payment which may be lower than the payment required to reduce the balance of the loan);
and initial fixed rate mortgages that quickly convert to variable rates.

This last class of mortgages has grown particularly popular among subprime lenders since the 1990s. Common lending
vehicles within this group include the "2-28 loan", which offers a low initial interest rate that stays fixed for two years
after which the loan resets to a higher adjustable rate for the remaining life of the loan, in this case 28 years. The new
interest rate is typically set at some margin over an index, for example, 5% over a 12-month LIBOR. Variations on the
"2-28" include the "3-27" and the "5-25".

Subprime credit cards

Credit card companies in the United States began offering subprime credit cards to borrowers with low credit scores and
a history of defaults or bankruptcy in the 1990s. These cards usually begin with low credit limits and usually carry
extremely high fees and interest rates as high as 30% or more.[6] In 2002, as economic growth in the United States
slowed, the default rates for subprime credit card holders increased dramatically, and many subprime credit card issuers
were forced to scale back or cease operations.[7]

In 2007, many new subprime credit cards began to sprout forth in the market. As more vendors emerged, the market
became more competitive, forcing issuers to make the cards more attractive to consumers. Interest rates on subprime
cards now start at 9.9% but in some cases still range up to 24% APR.

Subprime credit cards however can help a consumer improve poor credit scores. Most subprime cards report to major
credit reporting agencies such as TransUnion and Equifax. Consumers that pay their bills on time should see positive
reporting to these agencies within 90 days.

Proponents
Individuals who have experienced severe financial problems are usually labelled as higher risk and therefore have greater
difficulty obtaining credit, especially for large purchases such as automobiles or real estate. These individuals may have
had job loss, previous debt or marital problems, or unexpected medical issues, usually unforeseen and causing major
financial setbacks. As a result, late payments, charge-offs, repossessions and even foreclosures may result.

Due to these previous credit problems, these individuals may also be precluded from obtaining any type of conventional

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loan for a large purchase, such as an automobile. To meet this demand, lenders have seen that a tiered pricing
arrangement, one which allows these individuals to receive loans but pay a higher interest rate, may allow loans which
otherwise would not occur.

From a servicing standpoint, these loans have higher collection defaults and are more likely to experience repossessions
and charge offs. Lenders use the higher interest rate to offset these anticipated higher costs.

Provided that a consumer enters into this arrangement with the understanding that they are higher risk, and must make
diligent efforts to pay, these loans do indeed serve those who would otherwise be underserved. Continuing the example of
an auto loan, the consumer must purchase an automobile which is well within their means, and carries a payment well
within their budget.

Criticism
Capital markets operate on the basic premise of risk versus reward. Investors taking a risk on stocks expect a higher rate
of return than do investors in risk-free Treasury bills, which are backed by the full faith and credit of the United States.
The same goes for loans. Less creditworthy subprime borrowers represent a riskier investment, so lenders will charge
them a higher interest rate than they would charge a prime borrower for the same loan.

To avoid the initial hit of higher mortgage payments, most subprime borrowers take out adjustable-rate mortgages (or
ARMs) that give them a lower initial interest rate. But with potential annual adjustments of 2% or more per year, these
loans can end up charging much more. So a $500,000 loan at a 4% interest rate for 30 years equates to a payment of
about $2,400 a month. But the same loan at 10% for 27 years (after the adjustable period ends) equates to a payment of
$4,220. A 6-percentage-point increase in the rate caused slightly more than an 75% increase in the payment.[2]
(http://www.fool.com/investing/value/2007/07/10/the-skinny-on-subprime.aspx)

On the other hand, interest rates on ARMs can also go down - in the US, the interest rate is tied to federal
government-controlled interest rates, so when the Fed cuts rates, ARM rates go down, too. ARM interest rates usually
adjust once a year, and the rate is based on an average of the federal rates over the last 12 months. Also, most ARMs limit
the amount of change in a rate.[3] (http://en.wikipedia.org/wiki/Adjustable_rate_mortgages)

The cycle of increased fees due to default-prone borrowers defaulting is a vicious cycle. Though some subprime
borrowers may be able to repair their credit rating, many default and enter the vicious cycle. While this enhances the
profits of the subprime lender, it also leads to further vicious cycling as the subprime lenders are unable to recover what
has been lent to subprime borrowers. Hence the current subprime mortgage crisis.

Mortgage discrimination

Some subprime lending practices have raised concerns about mortgage discrimination on the basis of race.[1] Black and
other minorities disproportionately fall into the category of "subprime borrowers" because of lower credit scores, higher
debt-to-income ratios, and higher combined loan to value ratios. Because they are higher risk borrowers, they are more
likely to seek subprime mortgages with higher interest rates than their white counterparts.[8] Even when median income
levels were comparable, home buyers in minority neighborhoods were more likely to get a loan from a subprime
lender.[1] Interest rates and the availability of credit are often tied to credit scores, and the results of a 2004 Texas
Department of Insurance study found that of the 2 million Texans surveyed, "black policyholders had average credit
scores that were 10% to 35% worse than those of white policyholders. Hispanics' average scores were 5% to 25% worse,
while Asians' scores were roughly the same as whites."[9] African-Americans are in the aggregate less likely to have a
higher than average credit score and so take on higher levels of debt with smaller down-payments than whites and Asians
of similar incomes.

U.S. subprime mortgage crisis

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Beginning in late 2006, the U.S. subprime mortgage industry entered what many observers have begun to refer to as a
meltdown. A steep rise in the rate of subprime mortgage foreclosures has caused more than 100 subprime mortgage
lenders to fail or file for bankruptcy, most prominently New Century Financial Corporation, previously the nation's
second biggest subprime lender.[10] The failure of these companies has caused prices in the $6.5 trillion mortgage backed
securities market to collapse, threatening broader impacts on the U.S. housing market and economy as a whole. The crisis
is ongoing and has received considerable attention from the U.S. media and from lawmakers during the first half of
2007.[11][12]

However, the crisis has had far-reaching consequences across the world. Sub-prime debts were repackaged by banks and
trading houses into attractive-looking investment vehicles and securities that were snapped up by banks, traders and
hedge funds on the US, European and Asian markets. Thus when the crisis hit the subprime mortgage industry, those who
bought into the market suddenly found their investments near-valueless. With market paranoia setting in, banks reined in
their lending to each other and to business, leading to rising interest rates and difficulty in maintaining credit lines. As a
result, ordinary, run-of-the-mill and healthy businesses across the world with no direct connection whatsoever to US
sub-prime suddenly started facing difficulties or even folding due to the banks' unwillingness to budge on credit lines.

Observers of the meltdown have cast blame widely. Some have highlighted the predatory practices of subprime lenders
and the lack of effective government oversight.[13] Others have charged mortgage brokers with steering borrowers to
unaffordable loans, appraisers with inflating housing values, and Wall Street investors with backing subprime mortgage
securities without verifying the strength of the underlying loans. Borrowers have also been criticized for entering into
loan agreements they could not meet.[14]

Many accounts of the crisis also highlight the role of falling home prices since 2005. As housing prices rose from 2000 to
2005, borrowers having difficulty meeting their payments were still building equity, thus making it easier for them to
refinance or sell their homes. But as home prices have weakened in many parts of the country, these strategies have
become less available to subprime borrowers.[15]

Several industry experts have suggested that the crisis may soon worsen. Lewis "Lewie" Ranieri, formerly of Salomon
Brothers, considered the inventor of the mortgage-backed securities market in the 1970s, warned of the future impact of
mortgage defaults: "This is the leading edge of the storm. … If you think this is bad, imagine what it's going to be like in
the middle of the crisis."[16] Echoing these concerns, consumer rights attorney Irv Ackelsberg predicted in testimony to
the U.S. Senate Banking Committee that five million foreclosures may occur over the next several years as interest rates
on subprime mortgages issued in 2004 and 2005 reset from the initial, lower, fixed rate to the higher, floating adjustable
rate or "adjustable rate mortgage".[17] Other experts have raised concerns that the crisis may spread to the so-called
Alternative-A (Alt-A) mortgage sector, which makes loans to borrowers with better credit than subprime borrowers at not
quite prime rates.[18]

Some economists, including former Federal Reserve Board chairman Alan Greenspan, have expressed concerns that the
subprime mortgage crisis will affect the housing industry and even the entire U.S. economy. In such a scenario,
anticipated defaults on subprime mortgages and tighter lending standards could combine to drive down home values,
making homeowners feel less wealthy and thus contributing to a gradual decline in spending that weakens the
economy.[19]

Other economists, such as Edward Leamer, an economist with the UCLA Anderson Forecast, doubts home prices will fall
dramatically because most owners won't have to sell, but still predicts home values will remain flat or slightly depressed
for the next three or four years.[20]

In the UK, some commentators have predicted that the UK housing market will in fact be largely unaffected by the US
subprime crisis, and have classed it as a localised phenomenon.[21] However, in September 2007 Northern Rock, the
UK's fifth largest mortgage provider, had to seek emergency funding from the Bank of England, the UK's central bank as
a result of problems in international credit markets attributed to the sub-prime lending crisis.

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As the crisis has unfolded and predictions about it strengthening have increased, some Democratic lawmakers, such as
Senators Charles Schumer, Robert Menendez, and Sherrod Brown have suggested that the U.S. government should offer
funding to help troubled borrowers avoid losing their homes.[22] Some economists criticize the proposed bailout, saying
it could have the effect of causing more defaults or encouraging riskier lending.

On August 15, 2007, concerns about the subprime mortgage lending industry caused a sharp drop in stocks across the
Nasdaq and Dow Jones, which affected almost all the stock markets worldwide. Record lows were observed in stock
market prices across the Asian and European continents.[23] The U.S. market had recovered all those losses within 2
days.

Concern in late 2007 increased as the August market recovery was lost, in spite of the Fed cutting interest rates by half a
point (0.5%) on September 18 and by a quarter point (0.25%) on October 31. Stocks are testing their lows of August now.

On December 6, 2007, President Bush announced a plan to voluntarily and temporarily freeze the mortgages of a limited
number of mortgage debtors holding ARMs by the Hope Now Alliance. He also asked members Of Congress to: 1. Pass
legislation to modernize the FHA. 2. Temporarily reform the tax code to help homeowners refinance during this time of
housing market stress. 3. Pass funding to support mortgage counseling. 4. Pass legislation to reform Government
Sponsored Enterprises (GSEs) like Freddie Mac and Fannie Mae.[24]

See also
2007 Subprime mortgage financial crisis
Adverse credit history
Hope Now Alliance
Negative amortization
Carry trade

References
1. ^ a b c Study Finds Disparities in Mortgages by Race
(http://www.nytimes.com/2007/10/15/nyregion/15subprime.html?ex=1350187200&en=a9978e04a9864642&ei=5088&partner=rssnyt&em
The New York Times By MANNY FERNANDEZ Published: October 15, 2007
2. ^ Goolsbee, Austan. "'Irresponsible' Mortgages Have Opened Doors to Many of the Excluded
(http://www.nytimes.com/2007/03/29/business/29scene.html?ex=1332820800&en=e09a15f9b118d649&ei=5088&partner=rssnyt&emc=rss
", Economic Scene, The New York Times, 2007-03-29. Retrieved on 2007-08-12. "Professor Rosen explains, “The main thing
that innovations in the mortgage market have done over the past 30 years is to let in the excluded: the young, the discriminated
against, the people without a lot of money in the bank to use for a down payment.”"
3. ^ http://www.mbaa.org/NewsandMedia/PressCenter/58758.htm
4. ^ American Dialect Society (http://www.americandialect.org/index.php/amerdial/subprime_voted_2007_word_of_the_year/)
5. ^ Subprime mortgages (http://www.bankrate.com/brm/green/mtg/basics2-4a.asp?caret=8)
6. ^ "Need a Loan? No Problem." (http://www.fool.com/ccc/secrets/secrets02.htm)
7. ^ CardTrak.com - Most Trusted Source of Credit Cards Since 1986 (http://www.cardweb.com/cardtrak/pastissues/aug02.html)
8. ^ NAACP Fights Loan Discrimination (http://www.blackenterprise.com/cms/exclusivesopen.aspx?id=3262)
9. ^ Weston, Liz Pulliam, "Is your insurer discriminating against you?", MSN Money,
<http://articles.moneycentral.msn.com/Insurance/KnowYourRights/IsYourInsurerDiscriminatingAgainstYou.aspx>
10. ^ Morgenson, Gretchen. http://select.nytimes.com/search/restricted/article?res=F00914FE3B550C728DDDAA0894DF404482
News Analysis: Crisis Looms in Mortgages". The New York Times, March 11, 2007. Retrieved April 19, 2007.
11. ^ http://biz.yahoo.com/ap/070312/mortgage_meltdown_q_a.html?.v=1
12. ^ The Mortgage Lender Implode-O-Meter - tracking the housing finance breakdown, related to Alt-A and subprime mortgages,
lending fraud, predatory lending, housing bubble, mortgage banking, foreclosures, debt, consolidation, lawyers, class-action
lawsuits (http://www.ml-implode.com/)
13. ^ Opening Statement of Chairman Chris Dodd - Hearing on Mortgage Market Turmoil: Causes and Consequences
(http://banking.senate.gov/index.cfm?Fuseaction=Articles.Detail&Article_id=125&Month=3&Year=2007) . United States Senate
(2007-03-22). “people paying the price for the regulators’ inaction are homeowners across America struggling ... Homeownership
is supposed to be a ticket to the middle class. Predatory lending reverses the trip.”

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14. ^ Christie, Les. "Subprime blame game

(http://money.cnn.com/galleries/2007/real_estate/0704/gallery.paly_the_subprime_blame_game/index.html?section=money_realestate
", CNNMoney.com, CNN. Retrieved on 2007-08-12. "In the end, they are responsible for deciding that they could afford the
mortgage and signing the papers. No one forced them to take on a loan the couldn't afford."
15. ^ Morgenson, Gretchen. "FAIR GAME; Home Loans: A Nightmare Grows Darker"
(http://select.nytimes.com/search/restricted/article?res=F20813F93C5B0C7B8CDDAD0894DF404482) . The New York Times,
April 8, 2007. Retrieved on April 19, 2007.
16. ^ "Has the Housing Crisis Finally Arrived?" (http://www.thetrumpet.com/index.php?page=article&id=3043) The Trumpet.com,
March 29, 2007. Retrieved on April 19, 2007.
17. ^ Subprime lenders deny responsibility - Mar. 22, 2007
(http://money.cnn.com/2007/03/22/real_estate/subprime_lenders_deny_responsibility/index.htm?postversion=2007032218)
18. ^ Fleckenstein, Bill. "Next: The real estate market freeze"
(http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/NextTheRealEstateMarketFreeze.aspx) . MSN.com, March
12, 2007. Retrieved on April 19, 2007.
19. ^ Strasburg, Jenny. "Subprime Defaults to Soar, Hurt Lenders, Funds Say".
(http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=a8qWYRxr5s4c) Bloomberg.com, March 15, 2007.
Retrieved on April 19, 2007.
20. ^ Associated Press. "Will subprime mess ripple through economy" (http://www.msnbc.msn.com/id/17584725/) . MSN.com,
March 13, 2007. Retrieved on April 19, 2007.
21. ^ Durrant, Brian. Will the US subprime crisis cause a UK property meltdown?
(http://www.moneyweek.com/file/28100/will-the-us-subprime-crisis-cause-a-uk-property-meltdown.html) MoneyWeek, April 13,
2007
22. ^ Zibel, Alan and Dan Caterinicchia (2007-04-11). "U.S. Housing Aid needed, Schumer says"
(http://www.boston.com/news/education/higher/articles/2007/04/11/washington_sees_housing_woes_worsening/?page=2) .
Retrieved on 2007-04-19.
23. ^ TOBY ANDERSON, AP Business Writer (2007-08-15). "European markets slide; Asia closes down"
(http://news.yahoo.com/s/ap/20070815/ap_on_bi_ge/world_markets) . Retrieved on 2007-08-15.
24. ^ Fact Sheet: Helping American Families Keep Their Homes
(http://www.whitehouse.gov/news/releases/2007/12/20071206-7.html)

External links
Bill Bonner (2007-03-20). Blacks and Hispanics to Suffer Most from Subprime Crisis
(http://www.dailyreckoning.com.au/subprime-crisis/2007/03/20/) . The Daily Reckoning
(http://www.dailyreckoning.com) .
Peter Coy (2007-03-02). Why Subprime Lenders Are In Trouble
(http://www.businessweek.com/bwdaily/dnflash/content/mar2007/db20070302_477856.htm) . Business Week.
Subprime Lending (http://www.hud.gov/offices/fheo/lending/subprime.cfm) . United States Department of Housing
and Urban Development (2006-03-24).
Edward M. Gramlich (2004-05-21). Subprime Mortgage Lending: Benefits, Costs, and Challenges
(http://www.federalreserve.gov/boarddocs/Speeches/2004/20040521/default.htm) . Board of Governors of the
Federal Reserve System.
Q&A: Sub-prime lending (http://news.bbc.co.uk/2/hi/business/5144662.stm) . BBC (2007-03-14).
"NAACP subprime discrimination suit"
(http://www.mortgagenewsdaily.com/7162007_NAACP_Subprime_Lawsuit.asp) , Mortgagenewsdaily.com
List of Closed Lenders
(http://www.thetruthaboutmortgage.com/a-list-of-recent-mortgage-closures-mergers-and-layoffs/)
The Rise and Fall of Subprime Mortgages (http://dallasfed.org/research/eclett/2007/el0711.pdf) . Federal Reserve
Bank of Dallas (2007-11).
Jan 15 2008 Main sub-prime losses reported (http://news.bbc.co.uk/2/hi/business/7188909.stm) ].

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