America's Exploding Mortgage Crisis Reveals That Home Ownership Isn't Paradise for Everyone

By Howard Karger, Dollars and Sense
Posted on June 14, 2007, Printed on June 14, 2007
http://www.alternet.org/story/53826/

Anyone who has given the headlines even a passing glance recently knows the subprime mortgage industry is in deep trouble. Since 2006 more than 20 subprime lenders have quit the business or gone bankrupt. Many more are in serious trouble, including the nation's number two subprime lender, New Century Financial. The subprime crisis is also hitting Wall Street brokerages that invested in these loans, with reverberations from Tokyo to London. And the worst may be yet to come. At least $300 billion in subprime adjustable-rate mortgages will reset this year to higher interest rates. CNN reports that one in five subprime mortgages issued in 2005-2006 will end up in foreclosure. If these dire predictions come true, it will be the equivalent of a nuclear meltdown in the mortgage and housing industries.