American Mortgage defaults grow.

There is an increasing worry that problems in the US housing market is spreading to medium risk mortgage loans. Worries about the sub prime market (highest risk type of loans) has been in evidence for a while. HSBC for example is getting ready to write off $11 billion in bad debt loans. However according to David Liu, a mortgage analyst in UBS. THe number of defaults for US mortgages in the medium risk category has doubled to 2%, this is forecast to rise to 5% as the American Housing market continues to suffer from falling house prices. There are also concerns about rising interest rates and a general slowdown in the economy.

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