Sub-prime lenders face bankruptcy: Is trouble in the housing market going to lead the US into recession?
Wednesday, April 23rd, 2008Overt Operative asked:
America’s leading sub-prime lender is in bankruptcy and others are not far behind.
Sub-prime lenders provide variable rate mortgages to people who wouldn’t otherwise qualify for a home loan. These loans account for 20% of the homes sold in the already troubled housing market.
With rising interest rates, the default rate on existing home loans have skyrocketed, which has left the sub-prime lenders holding the bag. As a result, the bottom will literally fall out of the housing market this year.
Will the combination of increasing energy prices and a falling housing market lead us into recession? Or, is our economy strong enough to absorb the loss?
Balsabulb:
God loves optimists.
Question posted courtesy of: Keith
America’s leading sub-prime lender is in bankruptcy and others are not far behind.
Sub-prime lenders provide variable rate mortgages to people who wouldn’t otherwise qualify for a home loan. These loans account for 20% of the homes sold in the already troubled housing market.
With rising interest rates, the default rate on existing home loans have skyrocketed, which has left the sub-prime lenders holding the bag. As a result, the bottom will literally fall out of the housing market this year.
Will the combination of increasing energy prices and a falling housing market lead us into recession? Or, is our economy strong enough to absorb the loss?
Balsabulb:
God loves optimists.
Question posted courtesy of: Keith
