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2007, No. 13
Posted 2007-06-01

What Is Subprime Lending?

by Rajdeep Sengupta and William R. Emmons

A precise characterization of subprime lending is elusive. Unlike prime mortgages, subprime mortgages are not homogenous. One suggestion to better identify subprime mortgages is to classify mortgages by the loan-to-value ratio and the borrower's credit score.