Subprime loans are loans that were offered to borrowers whose credit scores were below the acceptable rating of 570. The mortgage lenders made significant earnings by lending to this type of borrower. However, as recent as 2007, these borrowers began to not pay their mortage payments and thus the mortgage market dropped significantly.
This activity relates to Subprime loans and risks they pose to the lender and ambiguity of various aspects to the borrower.
Using Case 7.4, answer all of the questions. After reading the document and before answering the questions, initiate your paper with the problem statement;
The problem to be investigated is ______________________
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