According to CNNMoney.com, Housing and Urban Development Assistant Secretary Darlene Williams states that loan defaults are stabilizing, and while we do see a market correction in some areas of the country, the overall economic forecast is not gloomy:
“Our economic fundamentals are strong. Loan defaults are half of what they were in the 1980s and interest rates are low compared to the double-digit rates of 20 years ago,” she said.
Subprime mortgages must stay despite the current crisis as they play an important role in increasing U.S. home ownership, Williams also said.
“Subprime mortgages democratize credit, and so we don’t want to throw that option away,” she said. “Not all of these loans result in foreclosures.”
About 5 percent of all U.S. mortgages are subprime, and only a fifth of those subprime mortgages are in risk of default…
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Housing official: Defaults are stabilizing – Sep. 24, 2007