Subprime Mess Only Getting Messier
Harry Smith: It's Starting To Look Like 1986 Again
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Play CBS Video Video Foreclosure Fallout As a rash of foreclosures changes the face of the American neighborhood, criminals are moving in and making matters worse. John Blackstone reports.
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Video Massive Foreclosure Wave Looms Interest rates on subprime mortgages will peak this fall in an economic tsunami that may cost over two million people their homes. Michelle Miller reports.
- Video Subprime Mortgages, International Effects
While subprime mortgages and the lackluster housing market are hurting many in the U.S., there are international effects as well. "Up to the Minute" Contributor Peter Allen explains.
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A foreclosure sign tops a sale sign outside a existing home in Denver on Wednesday, Aug. 29, 2007. (AP)
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A home is advertised for sale at a foreclosure auction in Pasadena, Calif., in this Aug. 14, 2007 file photo. The number of foreclosure filings reported in the U.S. last month more than doubled versus August 2006 and jumped 36 percent from July, a trend that signals many homeowners are increasingly unable to make timely payments on their mortgages or sell their homes amid a national housing slump. (AP)
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Interactive Eye On The Economy In-depth features on U.S. markets, taxes, employment and the Federal Reserve.
The subprime foreclosure mess that is spreading across the land like the plague is bad and likely to get worse. Today's Wall Street Journal has an excellent analysis on the front page of how deep and wide the pain is going to be.
Did you know high-rate mortgages accounted for 29 percent of home loans last year and more than 10 million high-rate loans were made in the last three years? Many were made to low-income folks but a lot were made to middle- and high-income earners as well. The higher the rate, the higher the risk.
There are neighborhoods in California where home prices have dropped by hundreds of thousands of dollars. Places where contractors have simply walked away from ongoing projects.
If this is beginning to sound familiar, it should. It's starting to look like 1986 all over again. The S&L crisis left a lot of the same kind of damage in its wake. Fat cats walked, some got bailed out, and the little guys ... well you know what always happens to the little guys.
Harry's daily commentary can be heard on many CBS Radio News affiliates across the country.
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- There is a neighborhood of about 50 newer homes here in S. Cal that has 6-7 bank owned properties that may have to be auctioned if they can not sell. This is quite a change from 2 years ago when a lot of people wanted to buy homes.
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