Monday, December 3, 2007

More Than Half of Sub-Prime Borrowers Could Have Gotten Conventional Loans

The Wall Street Journal finds a study that says 55% of the borrowers in 2005 who got sub-prime mortgages could have qualified for more conventional mortages with better terms. In 2006, 61% did. "The analysis also raises pointed questions about the practices of major mortgage lenders. Many borrowers whose credit scores might have qualified them for more conventional loans say they were pushed into risky subprime loans. They say lenders or brokers aggressively marketed the loans, offering easier and faster approvals -- and playing down or hiding the onerous price paid over the long haul in higher interest rates or stricter repayment terms," says the Journal.
In other news, Lennar Homes has sold $1.3 billion in land to Morgan Stanley for 40 cents on the dollar.

1 comment:

Ellen said...

How sad. I hope this leads to some changes in the mortgage industry.