By Les Christie @CNNMoney March 21, 2014: 7:29 AM ET
"Borrowers with bad credit were shut out of the mortgage market after the housing bubble burst, but now a handful of small lenders are starting to offer subprime loans again.
Once synonymous with toxic, adjustable-rate mortgages -- like the "exploding ARMs" that led many homeowners to lose their homes to foreclosure during the housing bust -- subprime mortgages are once again being offered to borrowers who pose a higher credit risk, typically those with credit scores that fall below 640.
But this time around, the loans are much more costly. During the housing bubble, lenders were handing out subprime loans with cheap teaser rates and little or no down payments. Now, lenders are charging…