I know personally about 6 people who make six figures, own a home in the range of $700-1 million and struggle month to month to make payments. If I were a betting man, I would assume that at least 1/2 of the forclosures are not subprime but are people with good credit that just got in over their heads.
These people have loans that fall into a category called Alt-A.
It is sexier to blame people with bad credit …
The subprime loans are the first ones to "roll over" (i.e. blow up) b/c they are the weakest links. Also, sub-prime borrowers are the "poster child" of what's wrong with real estate. Therefore, it’s easier to blame them.
There is currently evidence that the "contagion" is working its way to the Alt-A loans.
