The subprime mortgage crisis explained in detail Cheap credit and relaxed lending standards allowed many high-risk borrowers to purchase overpriced homes, fueling a housing bubble. As the housing market cooled, many homeowners owed more than what their homes were worth.

Subprime mortgages — also known as non-prime mortgages — are for borrowers with lower credit scores, typically below 600, that prevent them from being approved for conventional loans.

The Biggest Culprit: The Lenders Most of the blame is on the mortgage originators or the lenders. That's because they were responsible for creating these problems. After all, the lenders were the ones who advanced loans to people with poor credit and a high risk of default.

Among the important catalysts of the subprime crisis were the influx of money from the private sector, the banks entering into the mortgage bond market, government policies aimed at expanding homeownership, speculation by many home buyers, and the predatory lending practices of the mortgage lenders, specifically the ...