Due to the irresponsible mortgage lending practices that are taking place in the housing market, the delinquencies on home equity loans have been the highest since the third quarter of 2005. According the Mortgage Bankers Association, in the first three months of 2007, 0.58% of all mortgage transactions entered foreclosure, the highest level in U.S. history. In 2006, the subprime delinquency rate jumped to 13.77% from 11.5% - the most terrible in almost five years — despite the fact that the unemployment rate is much lower now. Due to the delinquencies and foreclosures, it is hard to find properties as majority of them are foreclosed.

Bankers and lenders are becoming more aggressive when it comes to pricing of the repressed homes. Also, larger losses could show up on the books of various firms and major U.S. banks if the credit performance continues to worsen.