Industry News

Subprime’s springtime surprise

Industry leaders coalesce around positive theme

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Upbeat housing data this week coupled with a renewed fighting spirit among survivors of this year's subprime saga may signal an unexpected spring comeback for the beleaguered sector. With as many as 20 percent of subprime lenders gone, or going, out of business in 2007, and resulting originations expected to slide up to $250 billion this year, the picture would seem weak-to-bleak for lending to borrowers with FICO scores below the prime threshold of 620. Industry leaders, however, are beginning to coalesce around a positive theme, calling the slowdown in subprime a "correction" that serves to weed out lenders who fail to use caution when writing loans for the riskiest borrowers. Supporting that upbeat assessment is news this week from the National Association of Realtors that pending sales of existing homes increased at a seasonally adjusted annual rate of 0.7 percent to 109.3 in February, from a reading of 108.5 in January. That's 8.5 percent below the level of a year earlier, but str...