Author Reference resources: new home loans, home loan application, repair loan, home loan modification, homes equity, load rates, lic home loan www.himloan.infoTo 2007 at the end of the first quarter, the United States single family housing stock worth about $22.8 trillion, among them, the housing and mortgage loan balance of about $10.4 trillion and housing rights (home equity) balance of about $12.4 trillion. In recent years, subprime home loans in the proportion of mortgage loans to rise significantly.
Source: the mortgage bankers association. Dark line corresponding left axis, on behalf of the American subprime home loans outstanding, the unit is dollars; Light color line corresponding right axis, on behalf of the American subprime home loans accounted for the proportion of mortgage loans
2001 years ago, subprime home loans in America is slow. Since then, has expanded rapidly, 2003 to 2005 more rapid growth in 2003, to $400 billion, by 2004 reached 1 trillion us dollars, 2005 years up to 1.4 trillion dollars. In 2006 growth. Subprime home loans mortgage loans in the proportion of about 2% from 1999 rose to 2004 in to nearly 12%, to 2006 in the fourth quarter, the proportion of close to 15%.
The 1980 s, the United States formed the subprime home loans to the development of legal environment, such as permitting the lender to charge higher interest rates and the cost, allowing the loan interest rate floats; Cancel the mortgage interest of consumer credit the provisions of the tax deduction, and enhance the loan orgnaization extends the motivation of mortgage loans, and so on.
First of all, since 2001, the federal reserve policy of low interest rates, low interest rates attract those who can't get the ordinary loans or credit rating is low-income buyers through high of subprime loans to buy housing, some middle-income groups and credit rating higher homebuyers also USES the subprime loans financing. Second, the American house prices rising strong, rising house prices expected increased the motivation of the person that buy a house borrow to buy a house. Again, as compared to normal loans, subprime home loans for standard and procedures and more liberal and simple, automatic application process application and credit score the promotion of technology improve the ability of the lender credit audit. Finally, subprime mortgage securitization of rapid development make lenders can sell credit portfolio for low cost capital, in turn pushes the subprime home loans of rapid development. Visible, subprime home loans, the expansion of the scale of the real estate market and the irrational exuberance of MBS and CDO of such securities investment enthusiasm is at the same time appear and there is the inner link, and it caused the prosperity, also breeds the current subprime loans crisis.
