This is just wrong. Individual mortgages, not just tranches of mortgage-linked liabilities, are considered prime or subprime [0].
At some point, holders of subprime mortgages began to default more than lenders' models predicted, either because the models were unintentionally wrong or because they were fraudulent, and there's a huge grey area where they could be a little of both.
At some point, holders of subprime mortgages began to default more than lenders' models predicted, either because the models were unintentionally wrong or because they were fraudulent, and there's a huge grey area where they could be a little of both.
[0] http://www.investopedia.com/ask/answers/07/subprime-mortgage...