The recent focus on the near-collapse of the subprime mortgage market has raised some interesting issues regarding fraud. Some borrowers are unable to meet their obligations due to legitimate reasons, while other are defaulting because of fraud committed in the process of getting the mortgage.
Either way, the high number of defaults on subprime mortgages is rocking the economy, and no one knows how bad things will get. The first to see the effects of this “crisis” were the large mortgage brokers, but smaller lenders are feeling the pain as well. As the real estate market has cooled, the effect of higher default rates is affecting businesses and individuals who are relying on credit for their survival.
The effects of this problem go far beyond just the housing market. This credit crisis is affecting many industries, and the world economy is feeling the pain as well. What was initially an increasing rate of default on home mortgages has now escalated to a full-scale crisis that is affecting the availability of credit in the world markets.