Subprime loans can be risky mortgages in the wrong hands, but you can learn to live with them.

Education is the key.

Subprime mortgages are home loans that provide a home financing option for those who don't qualify for more conventional prime mortgages. Subprime loans typically are more expensive than prime loans, and they carry more risk.

But that's what makes education critical -- before you sign on the dotted line -- according to NeighborWorks America.

NeighborWorks America is a nonprofit organization that delivers financial aid and training to troubled urban communities.

A NeighborWorks-backed loan program serves 3,000 customers from subprime demographic groups. Yet it has a loan success rate that's nearly on par with the loan success rate for prime mortgages nationwide.

As of June 30, only 3.3 percent of Neighbor work's borrowers were 30 days or more delinquent on their home loans. That's only slightly higher than the 2.6 percent delinquency rate, nationwide, for PRIME mortgages tracked by the Mortgage Bankers Association.

And, when compared with subprime loans nationwide, NeighborWorks loans really outperform. NeighborWorks' 3.3 percent delinquency rate is far below the more than 14 percent national delinquency rate for subprime loans.

How is that possible?

Education. Not just cursory class on home ownership before you buy, but continuing education that spans the duration of home ownership.

NeighborWorks' home owners learn home ownership readiness; budgeting and credit; mortgage finance; home shopping; home maintenance, even community involvement.

As a result, more NeighborWorks home owners remain home owners -- even through tough times.

Published: December 4, 2007

Use of this article without permission is a violation of federal copyright laws.

Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.