How is whats happening in the subprime market likely to affect the prime market?
MB: Many of the victims of abusive subprime lending have been people who would have qualified for a prime rate loan. In other words, people with good credit and a good debt-to-income ratio and clearly documented, adequate income to support the mortgage they sought. It may take them years to recover from the financial losses they suffered from the abusive subprime product or related practices, and they will be unavailable to the prime market. They won’t be in a financial position to take out a prime rate (or any other) mortgage loan for years to come. Sales of existing homes are at an 18-year low as a result of the economic losses suffered by victims of predatory lending and predatory broker practices. Presumably, some prime rate loans would have been used to support the purchase of those homes, and thus the prime market suffers from the lack of borrowers to access their products. NOW: How big is the problem of homeowners defaulting on mortgage payments? MB: It’s a huge problem. There i
