Subprime lending trends

Many innovative lenders are now focusing on the subprime market which offers potential borrowers a wider product line and better profits in place of the overall mortgage loan. Community bankers should be aware of the pros and cons of subprime lending before making the move. The benefits of subprime lending include the charging of higher rates and fees to borrowers with higher servicing fees and poor credit histories, while the down side of subprime lending includes more labor-intensive servicing and the risk of higher delinquency and foreclosure rates.
While Overall Mortgage Loan Demand Is Expected to Wane in Future Years, Demand for B- and C-Grade Loans Is Expected to Surge Upward. Many Innovative Lenders Have Already Found that [...]