The Subprime/Foreclosure Crisis
The U.S. economy has been gripped by a relentless housing crisis for almost two years. A key driver in this crisis has been the many subprime mortgages that involved high rates and fees -- often requiring no down payments -- that were made in the past several years. California is ground zero in the subprime crisis and the resultant spillover effects -- foreclosures, bankruptcies, decreasing property values to name a few. Recognizing that relying on the market alone is unlikely to bring an end to the crisis, the U.S. Congress and the Bush Administration are currently debating federal responses. Meanwhile, some states, including California, are undertaking their own initiatives.