SUBPRIME LENDING-15 YEARS LATER: AN OVERVIEW AND SUGGESTED STRATEGIES FOR REDUCING SUBPRIME MORTGAGE DEFAULT RATES

Tracy L. Washington
Benedict College
ABSTRACT
After the 2008 financial crisis, many financial market institutions yield to the approval of
subprime lending loans to potential homeowners. In 2010, mortgage lending standards became
stricter, requiring financial institutions to take a more serious approach to lending money to
potential homeowners. Strategies were created to help reduce subprime mortgage foreclosures in
recent years. Strategies helped to educate lenders, banks, and potential homeowners of the
various types of mortgage loans that were available to potential homeowners. Mortgage fraud
also played a part in the foreclosure process. Since the Covid-19 pandemic, the housing market
has drastically increased. This study provides an overview of the 2008 financial crisis and an
update on how the mortgage industry is sustaining subprime mortgage loans 15 years after the
Great Recession. This study also suggests strategies that can reduce the subprime mortgage
default rates.
Keywords: Subprime mortgage, foreclosure, great recession, homeownership, homebuying, mortgage fraud, Fannie
Mae, Freddie Mac, global financial crisis, predatory lending, conventional mortgage