Comments on: Subprime Mortgages: America’s Latest Boom and Bust http://www.em-forma.com/subprime-mortgages-americas-latest-boom-and-bust-2/ Helping You Stay In Your Home Fri, 29 Oct 2010 18:51:02 +0000 hourly 1 http://wordpress.org/?v=3.1.3 By: Loyd E. Eskildson http://www.em-forma.com/subprime-mortgages-americas-latest-boom-and-bust-2/#comment-1644 Loyd E. Eskildson Thu, 17 Dec 2009 20:16:55 +0000 http://www.em-forma.com/subprime-mortgages-americas-latest-boom-and-bust-2/#comment-1644 "Subprime Mortgages" is a short, balanced, academic review of a major current topic. Gramlich points out that subprime mortgages have increased home ownership from about 64% to 69%, particularly benefiting minorities and those with lower incomes. They have also led to improved loan application processing. <br /> <br />The bad side includes bringing potential abuses from new, largely unregulated mortgage sources, a 10X increase in default rates (some believe their default rate will reach 20X that of "regular" mortgages), and enormous losses in financial markets around the world. (Gramlich failed to mention the likely damage to American financial market credibility.) <br /> <br />Gramlich also points out that 45% of low-income home owners and 57% of renters are now spending over half their disposable income on housing - a too great load by most standards. Rating: 5 / 5 “Subprime Mortgages” is a short, balanced, academic review of a major current topic. Gramlich points out that subprime mortgages have increased home ownership from about 64% to 69%, particularly benefiting minorities and those with lower incomes. They have also led to improved loan application processing.

The bad side includes bringing potential abuses from new, largely unregulated mortgage sources, a 10X increase in default rates (some believe their default rate will reach 20X that of “regular” mortgages), and enormous losses in financial markets around the world. (Gramlich failed to mention the likely damage to American financial market credibility.)

Gramlich also points out that 45% of low-income home owners and 57% of renters are now spending over half their disposable income on housing – a too great load by most standards.
Rating: 5 / 5

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