WHAT COULD GO WRONG? Subprime Lite. “We have characterized the revised rule as subprime lite. Whether the rule makes sense as public policy is debatable. On the one hand, loans can be made without the borrower’s having sufficient equity to provide an incentive against default. Borrowers may also find themselves with insufficient income to cover the monthly payment. On the other hand, the retained statutory provisions concerning negative amortization loans, interest only loans, balloon payment loans, etc. may prevent the worst excesses of the subprime period. That being said even lower lending standards may be quite possible in the future.”