Where the Wolf Comes Knocking - washingtonpost.com: "'The tragedy of the current situation is that it was entirely predictable,' said John H. Vogel Jr., a professor at the Tuck School of Business at Dartmouth College, who wrote in 2005 about the dangers of mortgage-loan excesses. 'What's surprising is how fast this is unraveling,' he said. 'Mortgage brokers pushed exotic mortgage products that allowed people to buy houses that only made sense if prices kept rising. Now that houses have stopped appreciating, people are going to lose their homes and their savings.'
A major sign that broader trouble could be brewing emerged Tuesday after a national survey by the Mortgage Bankers Association showed a soaring number of homeowners failing to make their mortgage payments in the last three months of 2006. The group also reported that foreclosures on all homes leaped to the highest level in nearly four decades.
That news sent every major stock-market index plummeting as soon as it was released Tuesday.
A deeper look at the survey reveals a tale of two Americas.
In many parts of the country, including the Washington region, housing prices skyrocketed beyond income growth over the past few years. Millions of people, wanting to get a piece of the action, got risky types of mortgages to finance a home-buying splurge that was beyond their means."