Traditional lenders swarmed to a session on subprime lending at last week's Eastern Secondary Market Conference only to hear specialists warn them of the pitfalls of the business.

The market for loans to less creditworthy borrowers has taken off over the past couple of years, putting pressure on mainstream mortgage lenders to get involved. "Almost no one in prime isn't already in or looking very seriously at subprime," said Warren Raybould, senior vice president at GE Capital Mortgage, Raleigh, N.C.

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