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Subprime Markets, the Role of GSEs, and Risk-Based Pricing

Release Date: 
March 2002 (68 pages)
Posted Date:   
March 1, 2002

Despite the recent growth in the subprime mortgage market, little is known about subprime borrowers, their default experience, or subprime lenders’ underwriting practices. This report will help to expand what is known by looking at lending practices in the subprime mortgage market and the current and potential role of Fannie Mac and Freddie Mac. The report is based on a review of relevant literature and a series of interviews with subprime and prime lenders and representatives of consumer groups, regulators, investment banks and trade associations.

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Note: Guidance documents, except when based on statutory or regulatory authority or law, do not have the force and effect of law and are not meant to bind the public in any way. Guidance documents are intended only to provide clarity to the public regarding existing requirements under the law or agency policies.