SUB-PRIME

March 16, 2007, 10:47

missann

SUB-PRIME

I watched a new word being born on the TV the other day. The financial news anchor had been talking about "sub-prime" mortgages. Those are predatory, high risk mortgages that are now going into foreclosure. It is apparently a new buzz word in the financial world.

The thing that amused me was that within a few minutes of the financial report, another anchor, (Miles O'Brien?) used the term in reference to something non-financial. Later someone else used it, again in a non-financial sense. Thus we will now be bombarded with sub-prime sports scores, sub-prime beer, sub-prime spouses, etc. Remember, you heard it here first!

March 16, 2007, 11:21

neveu

Sub-prime has been in use for a while in the financial industry.

March 16, 2007, 17:47

tinman

World Wide Words:

quote:
sub-prime

This buzz word of the financial industry dates back at least to the beginning of the decade in North America but has only recently started to appear in British newspapers. It refers to a group of potential borrowers who would in plain language be called bad risks — former bankrupts, those with court judgements against them, or who have financial problems due to redundancy or divorce. There have always been firms prepared to lend money to people in these groups, at a price, but in the nineties there has been a significant tendency for established lenders to move into this market, particularly to provide mortgages. As a result, a number of euphemisms have surfaced, such as sub-standard, impaired credit, and non-conforming, but it seems that sub-prime is the most common and is likely to be the most enduring

Tinman

March 16, 2007, 22:35

BobKberg

Well, it's certainly memorable! The general concept reminds me of the attempt by the used-car people to first use the term "pre-owned" which still survives and then the term "pre-titled" which fell flat on its elegant face!

Bob

March 17, 2007, 02:17

Richard English

I have heard that many of the providers of mortgages to such poor risks are now in trouble as interest rates climb and defaults increase.

Why do I have little sympathy for the plight of the lenders and considerable sympathy for that of the borrowers?

March 17, 2007, 07:48

missann

I had not meant that the term sub-prime was new to the financial world, although it is relatively new. I was amused at the transfer of the term to things other than mortgages. E.g., a defective car, a stale sandwich, a poor sport's score would be sub-prime.

March 18, 2007, 13:09

tinman

quote:
Originally posted by missann:
Thus we will now be bombarded with sub-prime sports scores, sub-prime beer, sub-prime spouses, etc. Remember, you heard it here first!

Yes, and don't forget sub-prime beef and sub-prime numbers.

Tinman