This is all part of the oncoming global credit squeeze (it ain’t here yet), as lots of people in financial institutions are busy shuffling the deck chairs, denying to the bosses/central banks/regulators, their true levels of exposure). Don’t forget it’s not the ‘sub- prime losses (between 200 and 400 billion US$) that’s the problem. It’s going to be the loss of ‘Value’ to inflated assets (which huge debts are secured against) that takes place (too bigger number to guestimate) when sentiment and confidence collapse following the revelations which the market will expose. Having had 6 years or so of artificially low global I/R and lenders throwing money at anyone willing to borrow, with ever increasingly week criteria/risk premiums being applied, it was always going to end this way.
Thousands of UK buyers in the US are just discovering that trying to re-mortgage their properties is a different game in a falling market brought about by a credit squeeze. They are treated as ‘none conforming’ clients (sub-prime) just because they do not reside in the US irrespective of their financial position.
The unfortunate and feckless will lose their shirts and the rest of us will pay for in increased taxes and charges to help cover the losses and short falls.
Easy come but for millions of people it’s not going to be so easy go!