With the bottom feeders of the market (I’m one of them) disappearing, it is only a matter of time until the chain reaction moves up the chain. Many Alt-A borrowers depend on the bottom feeders to buy their homes as they move up.

Only the very rich, who aren’t dependent on selling current property to buy new ones, are able to weather most of the storm. They too will lose money, but not enough to cause major financial distress.