What is subprime mortgage market?

Subprime mortgage market

Sub-Prime Mortgage refers to the practice of providing loans to people whose credit rating is insufficient to obtain loans from normal mainstream mortgage sources.

Such mortgages, often privately made to lenders, come with fees that are higher than the normal loan interest.

Historical data

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In the US, such lending has grown to the point where people can make a profit by lending money to those who need it through a “marketplace,” a platform.

Therefore, some mainstream investment institutions are also involved in different identities.

The US stock market plunged in August 2007 because of losses in two hedges.

People gradually began to worry about the entire real estate market, and then spread to the entire credit system, becoming a crisis.

On August 10, 2007, this further panic spread to the world, causing a general decline in Asian markets. At the same time, the European market fell. Forcing the ECB to inject more than 90 billion euros in an attempt to stabilize the euro market.

In addition, on the 10th, after the US market opened, the Dow Jones Industrial Average opened more than 100 points lower, only because a large number of stocks were sold in early trading.

Subprime mortgage

The subprime loan market is aimed at customers who lack proof of income and are heavily indebted. Due to their low level of credit requirements, their interest rates are 2% to 3% higher than ordinary mortgage loans, accounting for 7% to 8% of the overall US home loan market. , but its profit is the highest and the risk is also the greatest. Many borrowers can get a loan without any mortgage and proof of income. As Rogers, said, “People can buy a house without capital. 

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