Many homebuyers bought houses with adjustable-rate mortgages. Were they paying their mortgages before their interest rates reset?
Many homebuyers bought houses with interest-only mortgages. Were they paying their mortgages before their interest rates reset?
ISTM that there were a lot of early warning signs that people would lose their houses when interest rates reset, and that would drive down the housing market.
What would have happened if lenders heeded the warnings (having already gotten themselves into a bad situation) and kept the mortgages at their original interest rates and also stopped lending to sub-prime borrowers?
I have an idea that it might have bought some time, but that if nothing else was done the economy would still have collapsed.