Please provide feedback to response below and sub

Please provide feedback to response below and submit in a word document. Be careful, make sure to avoid plagiarism and to use quotation marks and proper citation as required. No length limit, and double-spaced. Use APA format for citations and the required References page. Remember that the significant portion of your analysis should be in your own words. 

"I do not believe that subprime loans are an unethical instrument, but extra caution and due care must be done on the part of the mortgage lenders to ensure they are lending to those who have a low chance of default.

Forbes.com (Links to an external site.) states that a subprime borrower is generally defined as someone with a credit score of 660 or less. The FDIC further elaborates that a subprime borrower is someone who:

• Two payments that are more than 30 days late in a 12-month period, or 60 days late in the past 24 months.
• experienced a foreclosure, repossession, or charge-off in the past 24 months
• filed bankruptcy in past 5 years
• has a debt-to-income (DTI) ratio of 50% or higher

If a lender does their due care, which generally involves looking at credit reports, income tax returns, and pay-stubs, and the borrower falls under several of the above criteria, it may be best for both parties to wait to qualify for a loan. Some one that maybe has a credit score a little under 660 and maybe a single late payment of 60 days or more should not be automatically disqualified from living the American dream, especially if they have a DTI of well over 50% and no bankruptcy or debt forgiveness in the past. In my opinion, it would be unethical to automatically disqualify this borrower.

Though subprime lending became scarce in the years after the housing collapse, they are making a comeback under the new name of nonprime mortgages. (Investopia (Links to an external site.)) These are mortgages going out the those with credit scores as low as 600, many times with high interest rates and even variable interest rates. Sometimes fixed rate mortgages are being given out on 40–50-year terms or as interest only loans for the first 5-10 years. It seems that this comeback of the new nonprime loan may be being misused in a way that creates ethical issues, especially allowing some to get into a mortgage that only covers the interest of the loan for several years. Time will tell  if these newer practices work out or not."

References

https://www.forbes.com/advisor/mortgages/what-is-a-subprime-mortgage/ (Links to an external site.)

https://www.investopedia.com/ask/answers/07/subprime-mortgage.asp