A great article from the Wall Street Journal with supporting numbers, that states that the current housing & foreclosure crisis was not caused by sub prime loans, but rather by all of the “zero down” loans that made it so easy for so many borrowers to qualify for a mortgages and buy properties with zero equity.

Consider:

But the focus on subprimes ignores the widely available industry facts (reported by the Mortgage Bankers Association) that 51% of all foreclosed homes had prime loans, not subprime, and that the foreclosure rate for prime loans grew by 488% compared to a growth rate of 200% for subprime foreclosures. (These percentages are based on the period since the steep ascent in foreclosures began — the third quarter of 2006 — during which more than 4.3 million homes went into foreclosure.)

To read the entire article, just click here.



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