Hmm... Let me see - adjustable rate (which goes only up) loan with penalty vs. fixed-rate and no penalty. I think it's a no-brainer which one is more likely to default. What else is this university researching? "Is it better to be healthy and rich or sick and poor"?

Borrowers are guilty for being stupid and not reading the financial documents they're signing, and government is guilty for not enforcing the loan rules. (I was in shock when I found out about "no income verification loans", for example. How was this even legal?)

As much as I'd love to hate mortgage brokers and Wall Street, they didn't seem to do anything illegal in this case. No one forced the borrowers. It's like loosing money in a casino and then complaining that you were taken advantage of. Maybe we should have a hot-line for compulsive borrowers, like for the gamblers? Now THAT would be a good research subject!

Unfortunately lots of people out there don't read anything and then try to place the blame on others. Like a smoker getting lung cancer and then suing a tobacco company for giving it to them or the person that eats fast food daily and sues the fast food chain for obesity. As much as I would love to hate big tobacco and fast food...

I definatelt feel that it is the borrower - There is a reason why the loan is "subprime", the borrower has bad credit because they couldn't pay their financial obligations in the past. Based on that history - What makes you think they will in the future? I'm sure the loan has something to do with it but you see alot less "prime" borrowers defaulting on their loans even though they have adjustable rates.

Hi, Joe -- that seems to be why the center did this study: to show that people with credit histories similar to those who got subprime loans are defaulting much less frequently on prime loans designed for lower-income borrowers.

Whether subprime borrowers are at fault for getting loans with adjustable rates and unusual terms is a different matter, of course, and one the country will probably be arguing about for years to come.

I think this is just a massive case of "we as Americans can not be held responsible for our actions as individuals". It is very easy to blame the Bank, The mortgage company, etc. for a bad loan, I didn't know, blah blah blah...that is bull!! How many people bought way beyond their means expecting values and equity and salaries to rise forever?? Yes many aggressive lenders did loan over 100% LTV and that is their fault and they are paying the price too, but to simply blame the banks and accept no responsibility for borrowing beyond your means is ridiculous!

How many Donald Trump wanna bee's bought investment property after investment propery no money down interest only thinking they could cash out and retire to Rio??? These are the people who are now declaring bankruptcy today!!

i agree with the other commenters that ultimately all people are responsible for their own actions. However lenders also acted irresponsibly by using poor underwriting guidelines.

I only glanced at the study but it appears they only compared two factors; credit rating and subprime vs L/MI loans. There is a third factor which is underwriting guidelines. Were the subprime loans subject to looser guidelines? That could have been a major factor in defaults.

There are many factors that have come into play for homeowners. There are some solutions out there that can still make owning a home affordable and sensible including reducing the balance on your mortgage. I look forward to reading more of your articles. I have added your site to my RSS feeds.