Subprime lending:

Subprime lending (also known as B-paper, near-prime, non-prime, or second chance lending) generally refers to lending at a higher expectation of risk than that of A-paper, and generally accompanied by higher interest rates.
In the United States, mortgage lending specifically, the term "subprime" refers to loans that do not meet Fannie Mae or Freddie Mac guidelines. This is generally due to one or a combination of factors, including credit status of the borrower, income and job history, and income to mortgage payment ratio. The phrase also refers to bank loans taken on property that cannot be sold on the primary market, including loans on certain types of investment properties and to certain types of self-employed persons. Subprime lending encompasses a variety of credit instruments, including mortgages, car loans, and credit cards.
A subprime loan may have less room for financial difficulties of the borrower, which can lead to late payments and defaults.
Stemming from the credit crunch, attention has been drawn to recent subprime lending practices. It has been suggested that some lenders engaged in predatory lending practices. More extreme allegations include deliberately targeting borrowers who could not understand what they were signing or lending to people who could never meet the terms of their loans. Many of these loans included exorbitant fees and hidden terms and conditions, and they frequently led to default, seizure of collateral, and foreclosure. There have been charges of mortgage discrimination on the basis of race.[1] While often defended on the basis of lending to borrowers with compromised credit histories, the Wall Street Journal reported in 2006 that 61% of all borrowers receiving subprime loans had credit scores high enough to qualify for prime conventional loans.[2]
Due to the extent and the magnitude of the lending and credit crisis, which has affected the greater financial markets, the controversy surrounding subprime lending has expanded.
Proponents of subprime lending maintain that the practice extends credit to people who would otherwise not have access to the credit market.