Subprime Mortgage Crisis: Impact, Causes and Solutions for Low-Income Borrowers

Abstract

This paper focuses on the subprime mortgage crisis and its relationship to low-income borrowers, families, and neighborhoods. It examines how and why the current crisis developed, the implications to poor families and neighborhoods, and a solution to help low-income borrowers. Part I explores the nature and landscape of the subprime mortgage market. Part II discusses the impact of the subprime crisis on the poor. Part III discusses the specific political, business, economic, and legal causes of the subprime meltdown. Part IV offers a solution to the problem that assists capable and deserving low-income homeowners avoid foreclosure while resisting an overly broad bailout that would allow lenders and certain undeserving borrowers avoid the consequences of poor decisions. [From Introduction]