This is our mid-August focus on mortgage blues. Higher interest rates and falling property prices have contributed to rising delinquencies on subprime mortgages, which are offered to less creditworthy borrowers. This, coupled with increased relaxation of underwriting standards, has led to the bankruptcy of more than 50 mortgage lenders, the collapse of hedge funds, increased regulatory scrutiny and ratings downgrades, Marsh, a unit of Marsh & McLennan, said recently. So which group of financiers is rushing to protect themselves?
