The problems with the subprime mortgage market has been in the news lately with much speculation as to the effect this industry's woes will have on the real estate market and the economy as a whole.

Here is what the Wall Street Journal reported 3/12/07:

"Federal Reserve
Chairman Ben Bernanke and many other economists do not expect troubles in the subprime mortgage niche to impact the overall national economy, citing a low unemployment rate and income gains. Additionally, they point to data from the Labor Department indicating that only 8 percent of consumer spending is tied to the lowest-income Americans, who make up the bulk of subprime borrowers. However, the U.S. economy could suffer if investors and lenders begin shrinking the amount of credit available to prime borrowers--a scenario that sparked previous recessions. Furthermore, rising subprime foreclosures could worsen the housing downturn, with Lehman Brothers chief U.S. economist Ethan Harris anticipating a monthly increase in inventory of as much as 20,000 homes in 2008. California, Florida and other overheated markets--as well as Ohio, Michigan and others plagued by the downturn in manufacturing--would be hit the hardest."

Need a mortgage to buy your new home? Contact us at 800-428-5239. We will refer you to a reputable, reliable and consumer friendly lender.