What highly unethical practice involves placing prime-rate-eligible borrowers into subprime loans?

The practice referred to in the question is known as steering. This unethical activity occurs when a mortgage loan originator intentionally directs borrowers who qualify for better loan terms, such as prime rates, towards subprime loans, which usually carry higher interest rates and less favorable terms. This practice can result in significant financial harm to borrowers who could have accessed more advantageous borrowing options. Steering is rooted in a misuse of trust, where the originator prioritizes their own financial gain over the best interests of the borrower.

Falsifying income levels involves misrepresenting a borrower's financial situation to secure a loan, but it doesn't specifically relate to steering prime borrowers into subprime loans. Dunking is not a recognized term in this context and does not pertain to ethically questionable lending practices. Securitizing refers to the process of pooling various types of debt, including mortgages, and selling them as securities, which is unrelated to the practice of steering borrowers into less favorable loan options. This highlights the focused nature of steering as a significant ethical concern in mortgage lending.