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CHAPEL HILL -
Risky mortgage products -- not just borrowers with weak credit -- share the blame for the nation's housing meltdown, according to researchers at UNC-Chapel Hill.A study by UNC's Center for Community Capital shows that borrowers with similar risk characteristics defaulted more often when they borrowed subprime mortgages. They were less likely to default when they received loans made through programs that had terms associated with the prime market, such as 30-year fixed rates.Borrowers who had subprime loans were three to five times more likely to default, in part because of adjustable interest rates and prepayment penalties.The report also suggests that borrowers who may have qualified for a prime-rate mortgage were steered to subprime products by brokers, particularly those who received extra compensation for delivering mortgages with higher interest rates.
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