Here is the upside of the subprime mess

Maybe we can get more of these lenders…
How the subprime good guys give home loans to poor people, strengthen communities, and still make a profit. – By Daniel Gross – Slate Magazine

In a ‘free market’ such lenders would be much more important. And notice that they are for-profit entities.  Such lenders need to use soft data and judgement as much as hard data to make their loans.  There is now evidence that other lenders making subprime loans that were securitized substituted hard data for soft data in making their decisions.  A bad idea, to say the least.

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