Note in the graph above that 34.6% of U.S. homeowners own their houses free and clear of any debt, 50.5% of homeowners have prime mortgages, and 6.1% of homeowners have FHA or VA mortgage. Subprime borrowers make up only 8.5% of all homeowners.
In other words, more than 91 out of every 100 homeowners are NOT subprime borrowers, and only 4.4 out of every 100 homeowners is a borrower with an adjustable subprime mortgage, which are the only mortgage category with delinquency troubles.
For example, consider the graph below that shows the percent of foreclosures started in the third quarter 2007, by mortgage type.What is very interesting is that subprime fixed mortgages make up a lower percentage of the foreclosures started than either prime ARMs or prime fixed! So it is certainly the case that subprime credit in general is not necessarily a problem, but it is subprime adjustable rate debt that is the real source of the problem.
Bottom Line: 95.6% of homeowners are NOT subprime borrowers with adjustable rate mortgages.