Is Subprime Lending Ready For A Comeback?

Subprime mortgage lending earned a bad reputation in the years leading up to the financial crisis of 2007-2008, and rightfully so. In the midst of a freewheeling lending environment that ignored most tried and true underwriting standards, Subprime loans played a significant role in a cascade of default causing harm to borrowers, lenders, and investors alike.

When done correctly, however, such loans offer a safe alternative for credit-worthy borrowers who might be shut out of mortgages underwritten for sale to the conventional market. For many years before the mortgage meltdown, such loans were a vital pathway for homeownership and one company is again proving they can be a positive force for the industry as well as borrowers.

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