Abstract
The subprime market reflected an expansion of credit to those borrowers who might not otherwise have been served by prime market lenders. Typically, subprime borrowers were characterised by having lower credit scores, indicating some problems with their historical utilisation of credit. Lenders responded to public policy initiatives to expand credit to those constrained from homeownership by wealth, income, and credit constraints by offering a set of innovative products that did not have the same credit standards or documentation requirements as did those offered in the prime market. These products included low down payments, easier payment terms with low introductory interest rates, and longer amortisation terms. The subprime market grew rapidly from 2000 to 2006, collapsing near totally by the end of 2007.
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