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Fed's Gramlich on subprime mortgage lending

In a speech on 'Subprime Mortgage Lending: Benefits, Costs, and Challenges' given on 21 May, Edward Gramlich of the Federal Reserve said a relatively high rate of defaults on subprime mortgages raises warning flags, but expanding credit to those who might not otherwise be able to buy a home appears overall to benefit society.

"The increased availability of subprime mortgage credit has created new opportunities for homeownership and has allowed previously credit-constrained homeowners to borrow

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