Yes. Subprime loans will return, but they’ll be more conservative and basic.
Order has arrived in the Wild West. Gone are the speculative loans based purely on [tag-tec]appreciation [/tag-tec]and higher prices.
Aren’t subprimes supposed to be dangerous? Didn’t we learn anything?
Subprimes are tools which can be used in the right way or the wrong way. Unfortunately the country is just beginning to emerge out of a cycle where the tools were misused big time.
Besides, there’s an undercurrent in this country that owning your own home is the American Dream. Politicians will work overtime to insure as many voters as possible get that home and hearth with “a chicken in every pot.”
What are the new rules?
Terms will be more fair, but they'll be more balanced for those borrowers who can really afford the loans. Lenders will be encouraged to move these people up into prime [tag-self]loans[/tag-self] at a certain point.
In other words, the loans will be better quality. Subprime real estate investors, as well as homeowners will be encouraged to think in terms of basic real estate growth; not speculative irresponsibility.
Read Subprime Mortgages Will Return, But With Some Changes
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