Headlines continue to blame problems on ‘subprime’ borrowers but the excuse is getting old and no longer holds up to close inspection. I suggest to you that many of these borrowers had good credit at one time. To make the U.S. economy look good, and to make lenders, brokers, and investors very wealthy,that wealth had to be created. Appraisals increased, new mortgage products were invented, and interest rates dropped. Homeowners were told of the new wealth they had in their homes, and they took advantage of it. I estimate that phantom wealth at approximately $3 trillion (USD).
