Many Subprime Borrowers Qualified For Prime Mortgage Loans

A recent story in CNNMoney.com reports that many borrowers who wound up with higher rate subprime mortgage loans actually qualified for lower rate, prime mortgages. Among other things, the story states:

• "Freddie Mac, a government-sponsored mortgage-loan buyer, estimated that borrowers of 15 to 35 percent of all subprime loans it bought in 2005 could have qualified for prime-rate loans."
• "Fannie Mae, another government-sponsored loan buyer, estimated up to 50 percent of the borrowers, whose subprimes it bought that year, had credit profiles that could have qualified them for prime rates."

For more, see Wow, I could've had a prime mortgage (Why many borrowers who qualified for prime-rate loans wound up with subprimes instead).