US Subprime market
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Abstract:In this paper we will analyze the subprime market in the United States of America. We will define subprime borrower and lender and also discuss about the risks associated with the subprime market.
Introduction
There are some people who lack a good credit history and therefore they are unable to qualify for the best rates in the current market. Subprime lending is making loans available to such people at a very low rate of interest. Today, almost 25% of the total American population are associated with the subprime market.
There is always a certain amount of risk associated with both the borrowers and lenders involved in subprime lending by reason of the combined effects of poor credit history, adverse financial situations and high interest rates. The term “subprime” reflects not the lending rate but the borrower’s credit status.