The Subprime Loan Crisis Is Back… Here’s What It Could Mean for the Economy

by Justin Spittler
Casey Research

Subprime loans are going bad again.

A “subprime” loan is a loan made to someone with bad credit. If the term sounds familiar, it’s because lenders issued millions of subprime loans during the early to mid-2000s.

Banks made these risky loans thinking housing prices would “never fall.” When they did, subprime borrowers stopped paying their mortgages. The U.S. housing market collapsed, triggering the worst economic downturn since the Great Depression.

These days, lenders aren’t making as many reckless mortgages. But subprime lending is alive and well in the auto market…

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