Explanation
A. (Correct Response) If mortgage lenders are much less likely to consider risk factors other than credit score when evaluating borrowers with the highest credit scores, this might explain why there is a higher proportion of defaults among these borrowers. It suggests that lenders may be over-reliant on credit scores when assessing the risk of high-scoring borrowers, potentially overlooking other important risk factors that could affect the borrower's ability to repay a mortgage loan.
B. While errors in credit reports are a concern, this option does not distinguish between borrowers with high and low credit scores, if the scores are problematic they would be problematic across the board.
C. The basis of a credit score does not explain why there would be a higher default rate among those with the highest scores for mortgage loans specifically.
D. The relative size of a mortgage compared to other loans does not address the issue of why those with the highest credit scores would default more frequently.
E. The distribution of credit scores does not provide an explanation for the higher default rates among top-scoring borrowers in the context of mortgage loans.
The discrepancy in the default rates among borrowers with the highest credit scores for mortgage loans is most directly addressed by option A. It suggests that an over-reliance on credit scores by mortgage lenders could lead to a situation where other significant risk factors are not adequately considered, thus not preventing high default rates despite high credit scores.