What is a sub-prime mortgage
Thursday, August 9th, 2007[?]
We’ve all been in class but were afraid to ask the question. So, you’re in a social situation and someone is talking about problems in the sub-prime market and you want to ask, “What’s a sub-prime mortgage?”
Sub-prime mortgages are simply mortages that are written to creditors with less than good or poor credit.
When Warren Buffet invests in companies such as Geico who only deal with low risk customers, your brokerage firm may be creating funds in which they buy mortgages in a fund from sub-prime creditors.
Do you understand the problem?
