Subprime home mortgages back to pre-crisis levels: Fed

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The market share of subprime US home mortgages, which caused the collapse of the housing market at the epicenter of the financial crisis, has returned to pre-crisis levels, a central bank report showed Monday.

But the Federal Reserve Bank of San Francisco study said nearly all of the loans were now owned or guaranteed by the government, which has pumped hundreds of billions of dollars to keep the market afloat.

Government-backed agencies Fannie Mae, Freddie Mac and Ginnie Mae "are providing unprecedented support to the housing market -- owning or guaranteeing almost 95 percent of the new residential mortgage lending," said John Krainer, a senior economist with the regional central bank who penned the report.

"This shift in mortgage finance has had a profound impact on the types of borrowers receiving loans," he said.

The subprime market had shrunk to virtually zero percent in the first quarter of 2008 after triggering the housing collapse following defaults by borrowers.

Subprime borrowers, usually lacking good credit histories, find it nearly impossible to obtain mortgage loans from mainstream lenders.

Subprime home mortgages back to pre-crisis levels: Fed