The "sub-optimal" and "excellent" mortgage market in the United States is divided by the borrower's credit status. According to the level of credit, lenders treat borrowers differently, thus forming a two-tier market. People with low credit can't apply for preferential loans and can only seek loans in the secondary market. The secondary market serves the loan buyers, but the loan interest rate in the secondary market is usually 2% ~ 3% higher than that in preferential mortgage interest rates. Subprime mortgage loan has a good market prospect. Because it provides mortgage services to borrowers who are discriminated against or do not meet the mortgage market standards, it is very popular in areas where ethnic minorities are highly concentrated and the economy is underdeveloped. Subprime loan is a high-return business for lenders, but because the credit requirements of subprime loans are lower than those of primary loans, the borrowers' credit records are poor, and the risks faced by subprime mortgage institutions naturally increase. According to the research data of UBS, by the end of 2006, the default rate of repayment in the subprime mortgage market in the United States was as high as 10.5%, which was seven times that in the prime loan market. For the borrower personally, default will increase the difficulty of refinancing, lose the right to redeem the mortgage, and cannot enjoy the benefits brought by rising house prices. Moreover, any borrower's breach of contract will also have a negative impact on the borrower's living area. A survey in Chicago shows that if foreclosure occurs in a block, the average value of single-family houses in the block will drop by 65,438+00%, and if there is centralized default in an area, the credibility of the area will be seriously reduced. The repayment guarantee of American subprime customers is not based on their own repayment ability, but on the assumption of rising house prices. When the housing market is booming, banks can get high interest income without worrying about risks; However, if the housing market is depressed and interest rates rise, the burden on customers will gradually increase. When this burden reaches the limit, a large number of defaulting customers appear, stop issuing loans, and generate bad debts. At this point, the subprime mortgage crisis came into being.