It uses TV commercials, a half-hour public service program, and information booklets explaining how credit works and how to protect and repair it. We also know that about half of home buyers you have had to refer to the subprime market are just a notch below qualifying for lower-cost conventional financing. With all the new techniques we have to analyze and reduce credit risk, we thought there must be a way to help you offer these A-minus borrowers a better deal. It offers families with slightly impaired credit a mortgage that's two points below the subprime rate, and if they make their payments on time for 24 months, their rate drops a third point. In other words, they can repair their credit while they pay their mortgage.
Lenders have an option to serve families they used to have to reject or refer.
It's like giving people an instant pay raise. With this mortgage product, you can reach more new borrowers, serve them instead of referring them, and save them money. The lender response has been very good. And it's the right thing to do. We agree, and that's what we're doing.