More than 30 subprime lenders have closed since late 2006, hurt by rising defaults by less credit-worthy borrowers. The number of foreclosures on U.S. homes jumped by 12% in February, compared with a year earlier, as borrowers struggled with falling home prices and higher adjustable mortgage rates.
In Texas, subprime loans account for nearly 13% of all residential mortgages. Even so, Texas has a strong job market, healthy economy, and moderate home-price appreciation. As a result, it's unlikely that Texas homeowners will experience what has happened in other markets — where home values have fallen dramatically, leaving borrowers with subprime loans owing more than the home is worth.
Source: The Boston Globe & Texas Association of REALTORS®
