There are cases where a prime borrower was able to get a better loan by going to a “subprime” lender.
They took a 3 YR prepay and got a better loan.
The subprime lender was able to offer loans to many people who would not have otherwise qualified. Even at 10% interest, people who bought in 2002-2003 had nice equity by 2005. They got lucky on their timing.
The vast majority of loans are not defaulting. Even with 20% defaults, 80% are still paying. It’s the smaller % that has caused the collapse.
The problem was the risky BORROWER, not the loan.
ANYBODY who took out a risky loan and saw their property rise in value, isn’t complaining about the loan that they took out. They aren’t offering a share of their profits back to the lender.
THAT should be the REAL bailout plan. EVERYBODY who was a subprime borrower in the last 5 years who has benefitted should contribute to a fund to help out those with bad timing. 😉
