Booyah Breakdown: Subprime Time
Neither a borrower nor a lender be; For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry. -- Lord Polonius, in Shakespeare's Hamlet.
Homeownership is close to 70% these days. You can thank historically low interest rates and the president's push to have every American own a home. But that ownership translates into more than $9 trillion in outstanding mortgage debt these days.
Of that amount, about 20% is in subprime loans. And unless you've been under a rock, you've heard about the looming explosion of the subprime market.
Cramer has been talking about it daily. And while he's pretty bearish on the whole mortgage sector, he's "cautious" about the subprime arena. "I am worried. But I am not scared and I am not panicking," he said in a
The Borrowers"Subprime is a mortgage-industry term referring to folks with less than stellar credit," explains Keith Gumbinger, vice president of HSH Associates of Pompton Plains, N.J., which tracks a variety of loan products. A credit score of 700 or higher is considered very good. That means you pay your bills on time and don't have any bankruptcies under your belt. But if you have missed payments, filed for bankruptcy or have delinquencies in your past, your credit score will most likely fall to anywhere from 500 to 600.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV