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What effect will this have on the housing market

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As a reaction to problems in the subprime area, lenders are already tightening lending standards. What effect will this have on the housing market?

As the housing market began to boom at the end of the twentieth century and into the early twenty-first, the market share of subprime mortgages climbed from near 0 percent in 1997 to about 20 percent of mortgage originations in 2006. Several factors combined to fuel the rapid growth of lending to borrowers with tarnished credit; including a low interest rate environment loose underwriting standards, and innovations in mortgage financing such as "affordability program? to increase rates of homeownership among lower- Income borrowers.

Reference no: EM131130688

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