Need an research paper on the fall of the mortgage industry. Needs to be 6 pages. Please no plagiarism. Discussion of Sub-prime mortgages First let us have a definition of subprime mortgage and then have a review of how it operated. The term has been defined as real estate loans granted to someone who has no ability to get a prime mortgage. It is further defined as someone whose ability to repay the loan is questionable In the event such person is granted a loan, the interest rate for such a loan will be much higher than the normal rate. (Subprime Lending Resources). According to the report of Subprime Lending Resources, a person is considered subprime borrower if falls under the following categories:
He has a FICO score of 660 or less. he has late payments to any creditor within the last 12-24 months. he has collection accounts. has any repossessions within the last 5-7 years, and has a bankruptcy within the last 7 years.
Before 2007, it was easy to borrow money, and real estate in the US had its prime. People were as interested in real estate as return on investments was high at that time People will buy houses. make renovations then sell it at a handsome profit. The market condition created an artificial price that is not sustainable.
Many people took advantage of this situation, used their existing properties as equity to purchase real estate as an investment, and availed of the subprime lending facilities. Rates were attractive and everybody else wanted to own properties. It was easy to borrow .and even marginal borrowers were granted housing loans.
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