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August, No. 241

Against the backdrop of news reports on high mortgage delinquency rates, this article examines recent trends in mortgage lending and compares the prime and subprime markets in particular.

Last Updated: 08/29/2007

Comparing the Prime and Subprime Mortgage Markets

Sumit Agarwal, Calvin T. Ho

In this Chicago Fed Letter, the authors analyze the different mortgage types (prime versus subprime) and products (adjustable rate versus fixed rate) to explain differences in mortgage delinquency rates over time and across the Seventh Federal Reserve District. In light of recent news reports about the problems in the subprime lending market, our purpose is to document the recent trends in mortgage lending and analyze the rising level of delinquencies in the subprime mortgage market.