USA : The Devastating Effects of the Subprime Crisis

The subprime crisis is far from over in the USA. It is estimated that, on every day between July and September, an average of 2,700 (against 1,200 last year) saw their houses being seized because they could not keep up with the monthly payments of their adjustable rate mortgages. These data show the utmost gravity of a situation where Americans, who are strictly constricted by subprime mortgages, are hardly helped by banks, credit companies, or the government — which is quicker to come at the rescue of big financial institutions.

According to Mortgage Bankers Association’s data, more than four million home- owners were at least one month behind on their loan payment in June, and as many as 500.000 people were concerned by seizure procedure. The main reason for borrowers’ difficulty to meet their payments is the loss of their job or of another source of income, due to divorce or the death of their partner. Two years ago, 36% of late payers were affected by a loss of income or unemployment, but this figure has increased to 45% this year, with unemployment on the rise in the USA.