Original: According to Rowling, to characters for whom wizarding blood purity matters, Lily would be considered "as' bad 'as a Muggle," and derogatively referred to as a "Mudblood".
Simplified: According to Rowling, to characters for whom wizarding blood purity matters, Lily would be considered "as loathsome as a Muggle", and derogatively referred to as a "Mudblood".