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Details About The Subprime Mortgage Market
One of the biggest problems is how the market defines "subprime" -- they label it as 640 FICO or less. One 30-day-late payment can unjustly bring you to that level; to use that against borrowers is criminal. Banks have been manipulating borrowers with excellent credit so that they can put them into lousy loans that make the bank a ton of money but place the borrower into a larger payment that is built to fail sooner or later.
If the credit-scoring mechanisms (FICO) were realistic and banks rated a borrower's credit correctly, allowing for mistakes and some unavoidable items, it would result in borrowers being put into the proper loans. Banks would have made a bit less money but not bankrupted their customers. It is a system in which the borrower has very little leverage; you play on the bank's field or you go home … if you have one.
Hipotecas Prestamos May 7, 2007 10:17 PM
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