The subprime mortgage machine was up and running again, as if it had never broken down in the first place. If the first act of subprime lending had been freaky, this second act was terrifying. Thirty billion dollars was a big year for subprime lending in the mid-1990s. In 2000 there had been $130 billion in subprime mortgage lending, and 55 billion dollars' worth of those loans had been repackaged as mortgage bonds. In 2005 there would be $625 billion in subprime mortgage loans, $507 billion of which found its way into mortgage bonds.
The resurgence of subprime mortgage lending has been alarming, as if the 2008 financial crisis never occurred. Initially, subprime loans were concerning, but the scale of their return in the early 2000s became truly frightening. In the mid-90s, $30 billion was a significant amount for subprime lending; however, this figure skyrocketed to $130 billion by 2000, with over $55 billion turned into mortgage bonds.
By 2005, the situation escalated dramatically, with subprime mortgage loans reaching $625 billion, and an astonishing $507 billion of those adapted into mortgage bonds. This rapid growth highlights the recidivism of risky lending practices that contributed to the financial collapse of the late 2000s.
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