The Meaning Of 'Mortgage' Is 'Death Pledge'

Here is the Mortgage Lender Implode-O-Meter.

Over at Obsidian Wings, Hilzoy frets about the collapse of the mortgage bubble:

But the real potential for ugliness comes when you put those things together. A fall in housing prices drives consumer demand down, as well as hurting housing-related businesses. A credit crunch means that it's harder for anyone to borrow money, which means that all sorts of demand-creating activities that people want to borrow money to undertake won't happen. All sorts of people will lose money. Not good at all.

And remember: housing recessions take a long time to unwind. When bubbles burst, prices have to return to their normal, non-bubbly level. If the bubble is in tulip bulbs, that happens when people get rid of all the tulip bulbs they couldn't really afford anyways, and things go back to normal. But people don't get rid of homes they couldn't really afford nearly so easily. People like their homes. They'll part with almost anything else first. This could take a while.