Subprime Fallout Cutting Wide Swath with Huge Impact to Mortgage Brokers in Colorado Springs

Summary

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The fallout from subprime mortgage loans, those made to people with below prime credit scores, is making things more difficult for mortgage brokers and consumers alike.

Delinquency rates for subprime adjustable rate mortgages, which accounted for about 9 percent of all outstanding first lien mortgages, have continued to climb nationwide. During the first five months of 2007, subprime mortgage delinquencies rose to more than 12 percent, which is a six-year high, according to the biannual Federal Reserve monetary policy report to Congress. According to some estimates, losses associated with subprime mortgages could total between $50 billion and $100 billion, said Ben Bernanke, Federal Reserve chairman.

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Subprime Fallout Cutting Wide Swath with Huge Impact to Mortgage Brokers in Colorado Springs

During the last year, dozens of national subprime mortgage brokers and lenders have gone out of business. Locally, the subprime fallout also has caused many mortgage brokers to go out of business, said Bob Watson, a loan processor at American Finance Inc.

"There...

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