Recent research shows that complex mortgages were chosen by prime borrowers with high income levels seeking to purchase expensive houses relative to their incomes.

After that, borrowers should research the going rates for mortgage loans given to prime borrowers.

The problems have not spread far into the larger pool of prime borrowers, the report suggested.

According to government figures, about three quarters of second-mortgagees are prime borrowers: they have FICA scores above 620.

But interest rates on 2/28s rise more sharply than adjustable-rate mortgages given to prime borrowers.

In contrast, prime borrowers with adjustable-rate mortgages enjoy fixed rates for five or seven years, with interest rates raised at longer intervals after that.

Both prime and subprime borrowers were charged more for loans.

While I do not blame the poor for this, let's acknowledge that sub prime borrowers were not all necessarily poor.

Such loans have a higher risk of default than loans to prime borrowers.

Of course, basing loans on future earnings expectations is riskier than lending money to prime borrowers at 30-year fixed interest rates.