Not As Good As We Thought

Ben reports to the Senate Banking Committee. AP (07.19.07), via AmericaBlog:

"On the housing front, there have been growing problems for borrowers with spotty credit histories who hold higher-risk subprime mortgages. That has rattled investors and irked some lawmakers, who have criticized the Fed and other regulators for lax oversight.

Late payments and foreclosures are spiking for homeowners with these subprime mortgages, especially those with adjustable rates. Bernanke acknowledged those problems are 'likely to get worse before they get better.'"

Bernanke: Fed Acting on Abusive Loans

"'A lot of the subprime mortgage paper is not, you know, as good as was thought originally,' Bernanke told the panel. He predicted 'significant financial losses' associated with delinquencies on those mortgages. Some estimates are that subprime-related credit losses could be anywhere from $50 billion to $100 billion, he said."

Yeah, just ask Bear-Stearns.

At least 30 lenders have already gone bankrupt because of this debacle. Lord knows how many are teetering on the brink.