The Wall Street Journal this morning tosses cold water on the image of the average subprime mortgage borrower as some sort of luckless soul with poor credit and even poorer financial prospects. It turns out the subprime imbroglio has snagged even those Americans with fine credit histories.
An analysis for The Wall Street Journal of more than $2.5 trillion in subprime loans made since 2000 shows that as the number of subprime loans mushroomed, an increasing proportion of them went to people with credit scores high enough to often qualify for conventional loans with far better terms.
In 2005, the peak year of the subprime boom, the study says that borrowers with such credit scores got more than half — 55% — of all subprime mortgages that were ultimately packaged into securities for sale to investors, as most subprime loans are.
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