Brutal. There’s no other way to describe the findings in a new study of the subprime lending market by the Center for Responsible Lending. The North Carolina-based research group predicts that one in five subprime mortgages made in the last two years will end up in foreclosure. In all, about 2.2 million people who’ve taken out the loans since 1998 are expected to lose their homes. The foreclosures are higher than they need to be because a number of loan features in the subprime market place borrowers at unnecessary risk, says Keith Ernst, senior housing counsel at the research center. Not surprisingly, minorities are feeling the brunt of effect: More than half of African-Americans and 40 percent of Hispanics received subprime loans.
Study Predicts Foreclosure for 1 in 5 Subprime Loans [NY Times]