Historically, the "hard to finance" borrower was one with a risk-filled profile, usually consisting of late payments, low or sporadic income, and credit indicators that suggested an unwillingness or inability to manage one's debts. In the 1970s and 1980s, these borrowers were led to private money investors. Typically, these investors were high net worth individuals building portfolios of first and second trust deeds arranged at very low loan-to-values (LTVs) with substantially higher interest rates. The brokers who arranged these loans were later dubbed "hard money" lenders. As time evolved and credit markets became aware of the huge opportunity that existed in this segment, the "hard money" lenders were replaced with Wall Street firms creating mortgage-backed securities (MBS) and the business was renamed the far more innocuous "sub-prime" or "non-prime." Read more: http://nationalmortgageprofessional.com/news32705/jumbo-lending-today%E2%80%99s-environment
