Subprime Mortgage Lenders
Wall Street is worked up over the sudden bankruptcy of Southern Pacific Funding Corp., a subprime lender that writes mortgages for people with poor credit histories.
Credit terms tighten and stocks of subprime lenders tumble as investors worry about popular but risky mortgage practices, such as lending 125 percent of the value of homes.
Delinquencies are on the rise, and there are questions about some lenders’ accounting practices.
“The subprime market is starving from lack of liquidity and many parched lenders are looking for last minute mergers for new capital infusions,” read an October 1998 article in Real Estate Finance Today, a now defunct publication of the Mortgage Bankers Association.
Rest of the story.
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