“(Belinda Kovacik) she’s talking about a kind of mortgage business called subprime lending, the practice of giving adjustable loans to people with below-average credit or unverified incomes. Subprime lenders often require no money down and offer teaser interest rates that soon rise. They target marginal borrowers with weak credit. By last year, subprime loans made up 20 percent of the market for new mortgages. They're one of the factors in Indiana's growing rate of foreclosures. Hoosier homeowners, in fact, have led the state to claim the third highest rate of subprime foreclosures in the nation.” There has been a lot of news about subprime loans lately. I am glad attention is starting to focus on this type of loan. This loan should not exist. It is only helping to increase the amount of people who will become in debt. Subprime loans are tricky and risky. The average home buyer may not even know what he/she is getting himself/herself, respectively, into. Subprime loans help the rate of foreclosures go up. People see the ability to purchase their homes, but they do not see the fact they are using subprime loans. If finances become shaky or unsteady, the percentage of losing a home due to foreclosure goes up with subprime loans. I hope people are smartening up to subprime loans. Subprime loans give me a great education of what to and what not to do. Hopefully, people will make better decisions and try not to get subprime loans.
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