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2015: A Big Year for Non-Prime

 
In 2013, six years after the sub-prime crisis had played out, lenders tested the waters by reintroducing a new, safer non-prime product to mortgage markets
March 21, 2016
 

In 2013, six years after the sub-prime crisis had played out, lenders tested the waters by reintroducing a new, safer non-prime product to mortgage markets. Early uncertainty on the viability of non-prime was quickly stamped out as both borrowers and investors demonstrated a healthy demand for the products.

Despite early success, non-prime lending activity was fairly tame throughout 2014. In 2015, however, the market has really started to take off. Lenders and borrowers alike are catching wind of non-prime product availability, fueling both supply and demand for non-prime products.

Even though there are still only a few lenders that are exclusively underwriting non-prime loans, a handful of traditional lenders have jumped on the bandwagon in an effort to get a piece of the potentially enormous non-prime pie. Though consumer credit quality has continued to strengthen over the last few years, nearly a third of Americans with a FICO score are under 650 (according to FICO as of April 2015).

Read the full article at National Mortgage Professional.