How Bad Will the Mortgage Crisis Get?
February 21, 2008 | 10:50 am | by t-blender |Rate It:
time.com: The credit markets are seizing up and the uncertainty recently drove up short-term interest rates for municipalities and some rock solid institutions such as New York’s Metropolitan Museum of Art to 20%. And now even so-called prime borrowers, the ones who were properly vetted, are being sucked into defaults on their mortgages. Yet it’s still a relatively small number of institutions and individuals getting hurt by this not-yet-a-recession. So what’s the worst that could happen?
Sorry we asked.
A number of economists and banking industry experts believe the subprime crisis could metamorphose into the biggest debacle to hit the sector since the savings & loan catastrophe of the 1980s, which caused some $500 billion in losses to the banking industry. And that means the future of a couple of name brand financial institutions could be in jeopardy.
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