Question:

How are sub-prime mortgage lenders coping with the crisis?

Answer:

Basically, sub-prime mortgage lenders have been tightening sub-prime mortgage underwriting requirements - as fully opposed to the ease mortgage loans were issued once. Real bad credit borrowers still can find sub-prime mortgage lenders willing to extend money. It is more difficult to those who need to go stated income and need to borrow with more than 95% LTV.

Bad Credit Mortgage Loans: Hard to Get

However, sub-prime mortgages right now are particularly hard to obtain. Even though only less than 15% of the borrowers fall into the sub-prime category with credit under 620, their number was enough to shatter several (more than 20) sub-prime lenders. Some of those either shut their doors, or sought bankruptcy protection.

In result, the other sub-prime lenders have really tightened up loan guidelines. Credit scores have to be higher, loan amounts are smaller, rates are higher and larger down payment is required.

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