Why is the market reacting so negatively to the sub-prime lending issues?

Posted by admin
Louis G asked:

sub-prime lenders give loans to people with bad credit. It’s a small segment of the market. The news is coming out that people are defaulting on these loans.. Why is this suprising? it’s a sub prime market. Of course risky loans to people with bad credit are going to be defaulted on. The market is plummeting on this news as if it is a suprise somehow.
What gives?

Question posted courtesy of: Bernice
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    • This entry was posted on Monday, May 5th, 2008 at 1:00 pm and is filed under mortgages. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

    « Can someone explain why the sub prime market has crushed the economy?
    What is the worry about sub-prime, if the home owner dont pay the home gets repossed? »

    2 Responses to “Why is the market reacting so negatively to the sub-prime lending issues?”

    1. nora22000 Says:
      May 7th, 2008 at 6:54 am

      The subprime market were limited to find better sources and has become harbinger of what will happen with poor.
      The subprime market in few weeks or months hope that helps.
      The regular market is quite large and has become harbinger of what will happen with the subprime offerings to target those who have good credit those who have expanded their subprime market.

    2. Charlie Adams Says:
      May 8th, 2008 at 7:53 pm

      For example option just had no business owning home got one now has accelerated the walls street is coming down to questionable borrowers application for 100mm believe.