Apparently it isn’t only the subprime loans that are causing the fallout it is the prime loans. People have bought more home than they can afford in order to participate in the real estate boom. The default rate on the prime mortages are the problem.
I would rather have a performing sub prime loan than a non performing prime loan.
This means people will buy the house they need rather than the house they can manage with a 100% loan on an ARM mortgage. The impact of the squeeze affects other markets. On MSNBC radio I heard that 17% of car buyers were delaying car purchases because of the impact of the mortgage squeeze.
New homes, banks, building material suppliers, contractors, and even furnishing retailers will be affected. Look for bargains in homes and cars.
For people who manage their debt load, meaning that they have cash, opportunities are on the horizon.