Subprime Mortgage Lenders are ones which will lend to people who are refused by standard loan criteria. The typical reason for a borrower being refused by standard criteria is poor credit rating (which applies to about 25% of the population of America), but can also be about other factors such as different types of loan structuring.

Most of these lenders were in some way affiliated to the big loan companies and all but a few have ceased to exist recently. They were not making it known that they were sub-prime, but would allow borrowing by people who were refused by standard loan agreements, and because of this could charge higher interest or fees or both. Other types of loans can also be sub-prime, including credit cards and auto loans.

On the other end of the transaction, it was often not made clear to investors that the area they were investing in carried a significantly greater risk than usual. For example, in the 3rd quarter of 2007 subprime mortgages represented only 6.8% of the outstanding mortgages in the US, yet they amounted to 43% of the foreclosures begun. This concealment of the real risk for investors is one of the factors which caused the financial difficulties of 2008.

Typical borrower profiles which might exclude them from prime mortgages are such things as two or more late payments in the last 12 months, non-payment of a loan sometime in the past, bankruptcy in the last 5 years, poor credit score or merely insufficient credit history data.

Major chains or retail merchants often have a lot of their sales as sub-prime credit.

There were some disreputable businesses who intentionally tried to structure a loan in a way that would make it impossible for the borrower to keep up with the repayments. This strategy was used to trick nave people into borrowing more than they could repay.

Subprime mortgage lenders are currently rare but they can still be found if one really wants to look.

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