Subprime Lending is a Drain on Home Ownership
Source: Center for Responsible Lending

“Yeah, people got bad mortgages. But others were able to finally buy a home” begins a recent article in a national magazine, repeating the common assumption that subprime mortgage lending has helped increase the overall level of homeownership.

But a new CRL analysis shows that while the subprime market has produced more than $2 trillion in home loans over the past nine years, these loans have led or will lead to a net LOSS of homeownership for almost 1 million families.

The reason for this net loss? From 1998-2006, only 9% of subprime loans went to first-time homebuyers, but over 15% of subprime loans ended (or will end) with borrowers losing their homes through foreclosure.

+ Full Report (PDF; 117 KB)
See also: CRL Report Doesn’t Show the True Picture of Subprime Role in Homeownership (PDF, 43 KB; Mortgage Bankers Association)

This entry was posted on Tuesday, March 27th, 2007 at 6:32 pm and is filed under Business and economics, Consumer issues, Housing and real estate. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.