It is odd that the media is only discussing the impact on the subprime lenders. As housing prices drop in response to subprime foreclosures, the “Regular” lenders are also at risk. The zero down, or low down payments used by conventional lenders can leave a homeowner underwater. If the homeowner is deep enough in the negative category he/she may choose to walk away. It will only take a few more percentage point drop in prices to make recent buyers join the exodus. We have probably already seen a 20% drop from the highs of early 2006, and this puts many buyers at a breakeven or negative equity already. Many will try to hold out for some time, but why pay 4k per month when you can rent the same property for 2k