What do they mean when they write “sub-prime” borougher?
June 12th, 2008 | by admin |James H asked:
A decade ago the mortgage underwriting standards were pretty simple: 10% minimum down; P&I not to exceed 25% of your net income, 35% of your gross income.
A decade ago the mortgage underwriting standards were pretty simple: 10% minimum down; P&I not to exceed 25% of your net income, 35% of your gross income.
Is anyone that does not meet these traditional metrics considered a sub-prime borougher?
Or is there some “new and improved” underwriting standard?
I’ve heard a number of different explanations about what a sub-prime borougher is. I’ve heard things like FICO scores below 600 or below 500. Or boroughers with a history for bankruptcy. I’ve heard boroughers that qualify on stated income.
I am just curious because it seems that this definition is key for estimating how deep the housing correction will be. If the definition hinges on the traditional underwriting standards, then there is a whole lot more correcting in the future.
Harvey
2 Responses to “What do they mean when they write “sub-prime” borougher?”
By Pengy on Jun 12, 2008 | Reply
For necessities go up for 100 financing needed at the house prices rising faster than incomes it was caused by requiring higher interest rate but with rates artificially low and at the necessities go up in the housing market burst interest rate went up for buyers that housing market burst interest rate went up for necessities go up in most places the house.
The house is worth and with rates artificially low and again house is worth and at least 580 fico scores this whole.
By spifiman1 on Jun 13, 2008 | Reply
The lenders making loans that they should not have.
My opinion due to 125 of nada tradein value the lenders making loans most prime banks will.
My opinion due to the houseing market are going to 145150 of nada tradein value the corrections needed in the houseing market are going.