US mortgages:Waiting for the canary to gasp

Looking for the canary in the coal-mine of the US housing boom? Take a peak at the increasingly troubled mortgage lenders. Even as the Fed has raised rates, credit has continued to flow freely to homeowners. Lenders have failed to pass on to borrowers the full cost of the increase in short-term rates. Meanwhile, lending standards have been relaxed: what Alan Greenspan calls «exotic» mortgages have enabled people to buy homes which they can’t really afford. More air has been blown into the bubbl...