New Fed research: Many borrowers can be saved

New research by the Federal Reserve Bank of Boston shows more than half of subprime borrowers have yet to miss a mortgage payment, and many may be eligible for cheaper loans.

Eric Rosengren, president of the Boston Fed, said Monday that 26 percent of subprime borrowers in New England likely were eligible to refinance to loans with lower interest rates based on their credit scores, the equity they held in their property, and their original loan terms.

He urged a focus on helping these borrowers refinance rather than attempting to save borrowers who have already fallen behind on their mortgage payments. He said a focus on borrowers in better shape was likely to be more productive and "may avoid much greater costs later on."

Rosengren spoke at a breakfast meeting convened by MassInc, a local think tank, at the Omni Parker House hotel. (The text of his speech is available here.)