Friday, June 4, 2010

Are Sub-Prime Loans Back?

GE is offering Subprime loans in England!  But the connotation brought on by the word "Subprime" is just too negative and so this time around they are being called "Complex Loans".  I really can't see what is so complex about them: 2 years fixed rate at 5.99% with a Floating Rate after the fixed rate period.  Sounds like a Subprime loan to me!  Higher interest rate for the higher risk of low down payment AND lower credit scores.  From what I can remember, this is what got us into trouble 18 months ago? 

HSBC is also offering a complex loan that allows up to 2 defaulted credit items and 1 of the defaults can be a mortgage and the borrower can have outstanding unpaid judgements. 

England gave us the Beatles, but the idea of Complex Loans may be less popular in America considering how badly we got bit by the defaults which caused the unraveling of the mortgage markets.  We knew it was just a matter of time before somewhere, somehow, Subprime would again be talked about.

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