Monday, February 9, 2009
The next domino to fall
The doom-mongers reckon America's property market is on the verge of a new crisis as big as the subprime disaster that began in 2007. The fear is that borrowers with better credit histories, who took out Alt-A mortgages, are defaulting on a similar scale. Rising unemployment in America, where a record 598,000 jobs were lost in January alone, means many borrowers are struggling. Late payments and repossessions are soaring. Dozens of banks are affected because they bought parcels of Alt-A mortgages that were sold as securities and traded around the world. The picture is bleak.