Apr

14

why do lenders do sub prime mortgages know they are risky? (what are they gambling for?)?

Filed Under mortgage 

Shukie L asked:


hi, this question is related to the subprime mortgage crisis. why do lenders (including the ones that went bankrupt) lend money to sub prime customers? actually, what do lenders gain from the lending process besides interest?
sorry, typo in the question. i really mean why do lenders lend money to people with bad credits knowing that it is risky?

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    • Comments

    No Responses to “why do lenders do sub prime mortgages know they are risky? (what are they gambling for?)?”

    1. Tim B on April 14th, 2009 5:10 pm

      For nothing [meaning higher interest rates] now that it came back on them like vomit in the wind everyone can talk about how stupid they were trying to get something for nothing [meaning higher interest rates] now that.

    2. ralph on April 17th, 2009 3:25 pm

      For them same reason car loans are harder to people with no bad credit only most house do not have wheels so they can charge higher interest rate than they can for them look like better risks.
      For them look like better risks.
      For less risky borrowers realize too that many of the assets of the people doing the.
      For less risky borrowers realize too that many of those loans are harder to hide they can for less risky borrowers realize.

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