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Q.

What is meant by sub prime lending???

Tags: prime lending
Asked by Kanchan M, 14 Sep '10 01:36 pm
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Answers (3)

 
1.

Loan advanced to suspect borrowers
Answered by dhanendra kumar jain, 14 Sep '10 01:49 pm

 
  
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2.

In finance, subprime lending means making loans that are in the riskiest category of consumer loans and are typically sold in a separate market from prime loans. The standards for determining risk categories refer to the size of the loan, "traditional" or "nontraditional" structure of the loan, borrower credit rating, ratio of borrower debt to income or assets, ratio of loan to value or collateral, and documentation provided on those loans which do not meet Fannie Mae or Freddie Mac underwriting guidelines for prime mortgages (are "non-conforming"). Although there is no single, standard definition, in the United States subprime loans are usually classified as those where the borrower has a FICO score below 640. Subprime lending encompasses a variety of credit types, including mortgages, auto loans, and credit cards. The term was popularized by the media during the "credit crunch" of 2007.

"Subprime" could also refer to a security for which a return above the "prime" rate is adhered ...more
Answered by zohra imam, 14 Sep '10 01:40 pm

 
  
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3.

Giving loans at less then the prime rate
Answered by iqbal seth, 14 Sep '10 01:44 pm

 
  
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