Subprime mortgage lending and loans have certainly been in the news a lot lately. They usually tag along with a news story about the current spike in home foreclosures. In fact, I saw a story about it just a few days ago on KVUE.
There are many reasons that people default on mortgage loans and go into foreclosure. So it's not really possible to blame any one factor. But one thing is perfectly clear -- there is a connection between subprime mortgage lending and the number of foreclosures in the Austin area (and beyond).
Adjustable rate mortgages (ARMs) are aother piece of the puzzle. I call it the subprime-ARM-foreclosure triangle, and it's partially responsible for the current spike in home foreclosures.
So what are subprime mortgage loans, and how do they relate to foreclosures? And if you find yourself in a subprime lending situation, how can you protect yourself from becoming another foreclosure statistic?
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