More than a fifth of subprime homeowners in the UK have fallen behind with their mortgage repayments. In the United States we have another looming problem as gasoline continues to cost more. Subprime borrowers in the US are falling behind. Costs are escalating. In the past few days HSBC and UBS came forward with forecasts of more subprime problems ahead. Let’s take a look at subprime and Alt-A in total. A report on Housing Wire says “The number of troubled Alt-A borrowers in the 2007 vintage rose an eye-popping 26.5 percent from March to April alone, nearly reaching 17 percent of loan volume.”
No matter how you look at it there are too many Americans worrying about their future, the economy, and their credit. We often said the UK is a mirror of what we shall see in the United States within six months. If that is true, and given the high cost of fuel, problems will indeed get worse in the US. Customers say Wells Fargo calls customers continually if Wells thinks there might be a problem. HSBC customers says the same. This may be a very long summer for everyone.