Entry

What is sub prime crisis?

Aug 28th, 2008 19:04
vijay y, http://www.voxeu.org/index.php?q=node/460 http://www.tutorialsweb.com/index.html

The term “subprime” refers to the credit status of the borrower being 
less than what is normally acceptable. “sub prime” is any loan that 
does not meet “prime” guidelines. The phrase also refers to paper taken 
on property that cannot be sold on the primary market, including loans 
on certain types of investment properties and certain types of self-
employed individuals.
Subprime lending, also called B-paper, near-prime, or second chance 
lending, is the practice of making loans to borrowers who do not 
qualify for the best market interest rates because of their deficient 
credit history. When the subprime lending is done accross the society, 
and a significant number of lonees are unable to pay the dues in time, 
it leads to subprime crisis. The subprime crisis adversely affects 
several inputs in the economy, resulting in downward pressure on 
economic growth. 
vijay
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