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The process of lending to customers whose personal circumstances are less than ideal, due to lower income, credit problems or other issues.
After the credit crunch lenders have become more circumspect in their dealings with non standard mortgages. They require bigger deposits then pre credit crunch and use stricter lending criteria.
Normally lenders will sell their books of mortgages to offset their investment risk. With so much uncertainty following the spate of repossessions in USA, mortgage books are now seen by investment houses as high risk. This means that lenders are unable to free up their money, and many now sit on an uncomfortably unstable portfolio of clients..
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