Borrowers with shady credit who never should have been allowed near a dotted line weren't the only ones swallowed by the subprime debacle—credit-worthy borrowers received 55% of all subprime loans in 2005, the apex of the subprime surge, reports the Wall Street Journal. Incentive-motivated mortgage brokers put many borrowers into subprime loans, even those who qualified for better, more stable rates.
Experts say the mortgage industry, looking to cash in on the boom, required little or no documentation and steered customers to subprime loans because doing so was easier and more profitable. But borrowers, regulators say, also were to blame, signing documents they didn’t understand. In the end, many borrowers who planned to refinance were caught by falling prices and tighter credit.