They’re called “sub-prime” mortgages. A way to afford “more house” than your financial situation would indicate, if you can keep making the payments.
Increasingly, holders of sub-prime mortgages are in default, and losing their homes. Some experts, including an SU professor interviewed by The New York Times, wonder if the product they were sold was the problem.
“I worry that people are overexposed to risk,” said Stuart S. Rosenthal, an economics professor at Syracuse University. “We wouldn’t encourage people to buy risky stocks, so why do we encourage low-income families to invest in this risky asset, especially in tight markets?”
Read the full Times article about the growing number of sub-prime mortgage defaults and foreclosures here.