"If there is a fault line in the global financial system, it runs through the U.S. mortgage market" -- Mark Zandi, chief economist with Moody's Economy.com
Last year, 13.5 percent of mortgages originated in the U.S. were subprime, according to the Mortgage Bankers Association, compared to 2.6 percent in 2000. Overall, the subprime market was $600 billion in 2006, 20 percent of the $3 trillion mortgage market, according to Inside Mortgage Finance. In 2001, subprime loans made ups just 5.6 percent of mortgage dollars. -- CNNMoney.com
The scariest part of that statistic (the current foreclosure rate) is the fact that 2006 borrowers are still in their fixed-rate period. "What will they do when their payment starts to rise?" -- Glenn Costello of Fitch Ratings
In January, more than 14% of subprime mortgages were at least 60 days delinquent. -- MarketWatch.com
The subprime mess has reached crisis proportions as the widely cited Center for Responsible Lending reports that 4 percent of U.S. homeowners--or about 2.2 million--face the prospect of losing their homes. -- BuilderOnline.com
Predatory lending means that making a loan that the lender knows will have little chance of getting paid off without a host of penalties, and a high likelihood that the asset backing the loan will get confiscated at a nice profit for the lender. -- FoxNews.com
AND FINALLY, THE pièce de résistance...
California Mortgage Broker promises strawberry picker and mushroom farmer that they can afford a $720,000 home !!!
Final Equation...
Corrupt Mortgage Broker + Uninformed Low Income Home Buyer = Subprime Crisis
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