Reply With QuoteI'll just give you the gist. The mess happened because some people lent money to people who shouldn't be lent money. What do you think happened when the second group of people, as expected, were not able to pay?
Subprime Snafu
I've read about it for a lot of months now. But can anyone here help me understand better how subprime mortgages "caused" the recession?
I'll just give you the gist. The mess happened because some people lent money to people who shouldn't be lent money. What do you think happened when the second group of people, as expected, were not able to pay?
The question is why did they give them the money in the first place?
Without going into the nitty gritty of things, else I would bore you, let's just say some people thought they could make money of it.Originally Posted by Alvin
Biting the hand that fed it?
Its biting the hand that overfed it.
What does subprime mean anyway?
'Subprime' means lending to those with a high level of risk, such as a poor credit rating, the self-employed, and those who have a high debt/income ratio.
Due to the global credit crunch, many subprime lenders have temporarily stopped providing mortgages to new customers; some have even stopped permanently.
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