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Subprime Loans: The Under-the-Radar Loans that Felled a Market

“The unraveling of the U.S. economy began with the collapse of the subprime market. The subprime lending market provided a relatively new, untapped source of potential profits” (Watkins, 2011, p. 366).

“Although subprime mortgages accounted for less than 20 percent of all mortgages outstanding, just over half of these foreclosure initiations were on subprimes” (Gilbert 2011 p. 88). Naturally a review of the subprime lending meltdown would lead to the source of the risky banking behaviors and the government housing policies that created the loan availability.