US Sub-prime crisis and foreclosures

The most recent news is that in October, the number of foreclosures has nearly doubled to 225000. About 2 million home owners are potentially facing foreclosures when their adjustable rate mortgages resets at higher rate. The distribution of sub-prime lending across the US is shown in this map taken from the New York Times

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The political costs of this might however have been anticipated by Bush’s administration, which just came up with an agreement with mortgage industry towards a temporary rate freeze. The New York Times however reports the deal contains numerous limitations that would exclude many — if not most — subprime borrowers. For example, any homeowner who is behind in mortgage payments will not be eligible for the deal.

Latino and black minorities homeowners are the most affected. These maps, taken from this BBC report, are quite indicative of the correlation between foreclosures and blacks groups.

Here are whole sub-prime lending in Cleveland

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Here are mainoly black areas

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And here are foreclosures

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