Subprime

I'm currently writing an article that references the recent subprime mortgage meltdown, and I got a kick out of some of the formal language used to describe companies that specialize in originating subprime mortgages: "The company offers a range of mortgage loan products to borrowers, commonly referred to as nonconforming borrowers, who generally do not satisfy the credit, collateral, documentation or other underwriting standards prescribed by conventional mortgage lenders and loan buyers..."

That is, we make risky loans to deadbeats. That is, people with a history of not paying their creditors. That practice accelerated after about 2002, and I figured it was a game of averages. Sure, a lot of people are going to default, but the high rates paid by those who do not would make up for it. Someone's keeping track to make sure it works out that way, right?

Well, no. The subprime lenders walked off a cliff.