How Bad Will the Mortgage Crisis Get?

Matches feature which will move next week — A foreclosed home as seen in Chicago, January 28, 2007. REUTERS/John Gress

By Janet Morrissey, Time

The credit markets are seizing up and the uncertainty recently drove up short-term interest rates for municipalities and some rock-solid institutions such as New York’s Metropolitan Museum of Art to 20%. And now even so-called prime borrowers, the ones who were properly vetted, are being sucked into defaults on their mortgages. Yet it’s still a relatively small number of institutions and individuals getting hurt by this not-yet-a-recession. So what’s the worst that could happen?

Sorry we asked.

A number of economists and banking industry experts believe the subprime crisis could metamorphose into the biggest debacle to hit the sector since the savings and loan catastrophe of the 1980s, which caused some $500 billion in losses to the banking industry. And that means the future of a couple of name-brand financial institutions could be in jeopardy… Read more

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Zac Vawter, a 31-year-old software engineer from Seattle Washington, climbs 103 floors to the top of the Willis Tower using the worlds first neural-controlled Bionic leg in Chicago, as Physical therapist aide Suzanne Finucane (L) looks on November 4, 2012. According to the Rehabilitation Institute of Chicago, their Center for Bionic Medicine has worked to develop technology that allows amputees like Vawter to better control prosthetics with their own throughs. REUTERS/John Gress