Wall Street Journal Analysis Finds Subprime Loans Went To Borrowers With Good Credit
Bolstering the Center for Responsible Lending's assertion that some borrowers who could have obtained prime loans received subprime loans instead, the Wall Street Journal reported today that numerous prime-worthy borrowers received subprime loans.
According to the Journal's study, in 2005, prime-qualified borrowers received 55% of all subprime loans, up from just 41% in 2000. Even some borrowers with truly excellent credit took out subprime loans. The Journal suggests that the problem is due to a combination of poor research, aggressive or deceptive marketing, and pressure on mortgage brokers to maximize the yield spread.
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