If someone can’t afford to buy a home using a solid conventional loan, not one of those zero principal, variable interest smoke and mirrors deals that were all the rage a few years ago, then they shouldn’t even think about buying.
I’m glad the sub-prime mortgage market finally crashed.
Two seperate thoughts.
Subprime loans are not and never were the “exotic” negative amortization loans we heard about. Those are a seperate issue.
Subprime should return to what it was before. “Yeah, we’ll lend you money with your credit score. But, you need this, that, and this...” It’s the lack of the “this, that, and this” that created the problem.
Using exotic loans is fine, IF, you are still able to afford a “normal” conventional loan. Don’t do it if it’s the only way you can buy the house.