emily x

But Is Subprime Really the Issue?

"The broad definition of subprime loans are loans that are made to borrowers that have less-than-perfect credit." -- True, but incomplete: the kinds of adjustable-rate loans that are causing all the trouble were originally designed for people with high incomes who needed short-term financing. These loans should never have been offered to people w/ doubtful ability to repay. And I agree completely that "lenders [have] not adequately cushioned themselves for the default risk that they were going to face." The whole thing is just a giant, collective sticking of the head in the sand.