Subprime Mortgages Making a Comeback

140127131704-n-housing-market-rebound-first-time-home-buyer-00003014-620x348NEW YORK (CNNMoney)

Borrowers with bad credit were shut out of the mortgage market after the housing bubble burst, but now a handful of small lenders are starting to offer subprime loans again.

Once synonymous with toxic, adjustable-rate mortgages — like the “exploding ARMs” that led many homeowners to lose their homes to foreclosure during the housing bust — subprime mortgages are once again being offered to borrowers who pose a higher credit risk, typically those with credit scores that fall below 640.

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