Mortgages for borrowers with higher expected default rates are also known as ________.
A) Adjustable-rate mortgages
B) Prime mortgages
C) Alt-A mortgages
D) Fixed-rate mortgages

Question

Quizplus · Accepted Answer

Alt-A mortgages are designed for borrowers who do not qualify for prime mortgages but are not considered subprime borrowers. These borrowers may have higher expected default rates, such as self-employed individuals or those with inconsistent income. Alt-A mortgages typically have higher interest rates and fees compared to prime mortgages, but lower rates and fees compared to subprime mortgages.

Mortgages for Borrowers with Higher Expected Default Rates Are Also