So much has been said in recent days about a possible yet cautious return to subprime mortgage lending as lenders lowered their credit-score requirements for FHA mortgages and other agency loans with certain limitations. Industry participants, however, say today’s “subprime” is a misnomer and certainly not the same toxic subprime mortgage product that pushed the U.S. financial system to the brink of collapse. Lenders are more cautious in the post-subprime era and they no longer practice risk layering on loans to borrowers with less-than-stellar credit histories as they did in the past, industry observers say. “In the past, lenders combined risk layering with low credit scores,” said Brian Chappelle, a mortgage industry consultant. “Today, I would be shocked if any lender used Fannie Mae, Freddie Mac or the FHA as a vehicle for traditional subprime because they would be ignoring the possibility of repurchase or indemnification.” Lenders today are...