What company/loan officer took the Loan Application?
Who got the credit report and verifications of income. Ratio of debt vs
income to repay.
Who made the appraisal. Was he/she qualified to make it?
Who approved the loan? A loan committee, an individual?
What was the lender's underwriting standards?
Or, did any one really give a damn?.
Who packaged these loans for sale to other investors?
Who were they. Domestic or foreign?
Were these loans sold off the shelf,and the lender kept the orgination fees/points? Or did the lender keep part ownership and the servicing?
Who handled the collections of past due payments?
Were the lenders Federal Insured Lenders, or just who??
I am an old 76 year old "thank God, retired loan officer," who used to approve ALOT of real estate loans.. for many years.. VERY, VERY
FEW FORECLOSURES.
We USED to base a loan on the person, his/her credit history, the collateral of an honest appraisal and the ability to REPAY( The 3 CCC's)
What happened?

George T. Ziegler, Kearney, Missouri

Mr Kroszner said: “We are looking very seriously at whether we can write rules that will be helpful to protect consumers in this [sub-prime mortgage] market while maintaining responsible credit from responsible lenders that can be handled responsibly by people in this market.”

Why the need to use the word "responsible" THREE times in this ONE statement?

Because the whole world banking system is utterly, completely, entirely IRRESPONSIBLE ! I don't expect any changes in that regard in my lifetime.

Steve in Maryland, Germantown, Maryland

Obviously very unfortunate circumstances for those suffering mortgage stress, and similarly for those investors who have bought the tranches of ARMs.

In Australia homeowners typically borrow with a variable rate mortgage that seems similar to ARMs. Fixed interest loans are also available but tend to used by investors. In a way this system gives the Australian Reserve Bank more ability to control inflation when interest rates are increased, and similarly to assist when rates fall. The system appears robust provided mortgages are provided sensibly.

Nevertheless we are now seeing more frequently Australian newspaper articles about rising bankruptcies and foreclosures. Most are due to mortgage stress (defined as spending more than 30% of income on a mortgage.)

Hugh, Sydney, Australia

As you point out, the banks are attempting to work out alternate payment schedules with the delinquent borrowers There is however, a significant complication. Many of the delinquent mortgages no longer belong to the banks . Over the last several years, they were sold to mortgage consolidators who included them in pools that were in turn re-sold in tranches to investors. In quite a lot of cases, it is nearly impossible to determine who has the authority to renegotiate any particular mortgage agreement. Worse, many of the delinquents can't really qualify for a loan or meet even liberal repayment terms. So, 720,000 losses strikes me as rather optimistic; the real numbers are apt to be much higher . To be polite about it, this is not a Monet.

Jungle Jim , Clearwater, Florida

I think the ARM rest number should be $1 trillion or about 492 bil pounds, not $1 billion. Excellent article othewise. It does look as if the 1.8 mil foreclosure number is quite a bit on the conservative side. Just a straight-line projection of the first half numbers gets you there but the 2nd quarter was higher than the first and nearly every month higher than the last.

Lastly, the number of homes seized will likely be higher than 40% of foreclosures. That ratio dates to a time when a lot of folks who got in trouble could easily sell for enough to pay off the loan or refinance based on a higher current price. Increasingly, those options appear to be - ahem - foreclosed.

Deron, Arlington, Texas USA

If 58% of foreclosures this year relate to sub-prime, 42% relate to so-called better quality loans such as Alt-A and prime. Little or no documentation, teaser low rates with amortization and also rife amongst Alt-A loans - the difference being borrowers' better credit records. But a good record could be obtained by no defaults over the last two years. So-called prime loans were often super-prime that met the criteria limiting size of loan and loan to value ratio. Many qualified by being accompanied by piggy-back second mortgages which lifted the loan ceiling and loan to value levels.

While this article purports to state that the sub-prime problem is as bad if not worse than feared, the more powerful message in the data is that the problem is in no way confined to sub-prime mortgages.

Brian Reading, Pukekohe, New Zealand