Yes, unfortunately this happens. Contrary to the common perception that all subprime borrowers have poor credit histories, a number of studies have found that people with good credit have also been sold high-cost subprime loans. These were people with high credit scores that would have qualified for loans with lower interest and fees and other favorable terms. One reason that this occurs is that subprime loans are often very aggressively marketed. Borrowers are lured with promises such as fast and easy loan approvals. Another reason is that many borrowers do not read their loan documents prior to signing them and, therefore, do not know what they are getting into. Additionally, many borrowers do not shop around carefully for a loan to be able to compare the rates and terms offered by different lenders.
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