Day by day, evidence grows that the housing finance boom of the last few years was dangerously out of control. Mortgage brokers gave loans to people who could barely afford a house — and then to people who couldn’t.
Now we are beginning to see the results.
The Mortgage Bankers Association this week said foreclosures hit a record late last year, amid rising delinquencies and late payments.
Most ominous was the data on “subprime” borrowers — a euphemism for people who received loans with no collateral or without anyone checking their incomes or credit.
More than one in eight sub-prime mortgages was reported delinquent at the end of 2006 — the highest rate in four years.