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Besides erasing billion of dollars in stockmarket valuations, the sub prime credit crisis is deeper still. The US economy get a shake every once in a while due to these credit losses. But the real danger lies in extending mortgage loans to sub prime borrowers. Until today, people with less than perfect credit score could buy a home and until recently could also afford one. But now due to high home prices and credit losses, they can neither afford homes, let alone qualify for a loan. As a direct result of this, home prices will continue to soften and valuations will decline until the borrowers can again afford the homes and can either finance it through other means or by getting small amounts of sub prime loans. And the banks will not be touching the sub prime market for a while until the economy gives indication of improvements.