now that the sub-prime mortgages are on everyone's lips, it seems proper to explain to my readers the meaning of this word
The sub-prime mortgages are loans or quality non-primary. That is granted to customers are set at high risk, which according to their characteristics (low income or a history of bankruptcy) are not eligible for normal credit market. The interest rate and fees charged by lenders are much higher than the average to compensate for the high level of risk. Many of these loans were securitized, that is transformed into debt and sold to institutional investors.
In the United States a growing number of people resorted to extreme forms of mortgage loans for buying a first home. After rising interest rates, many families are no longer able to repay these loans, with indirect effects on those who invested in these products, hence the credit crisis so-called sub-prime
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