San Francisco, CA, USA
April 14, 2008

Subprime Mortgages: An Autopsy and a Prognosis

Table of Contents

Return to report Abstract

Executive Summary 03
Who Are Subprime Borrowers? 08
  Key Role of FICO 08
  Seven Key Growth Drivers 10
The Evolution of Subprime 15
  1993-2001: The Subprime Spark 15
  2002-2007: The Subprime Explosion 15
  2005-2007: Top 15 18
  The Autopsy 18
  Some Lessons Learned 22
  The Big Drop Off: Origination Volumes 23
  The Other Big Drop Off: Jobs 25
The Prognosis for the New Subprime 28
  General Considerations 29
  The New Frontier: Thin Files and No Files 31
  The New Subprime: Fraud Databases 38
  The New Approach: Coopetition 39
  Summary 40
  Government Intervention 40
Conclusions 44
  The Subprime Prognosis: A Major Decline, But Eventual Reversion to the Mean 44
  Final Thought 48
 

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