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Record mortgage Mess

Almost 6% of all mortgages were delinquent nationwide in the 4th quarter and foreclosure starts were at the highest levels ever, according to a report issued by the Mortgage Bankers Association. After surging in popularity during the U.S. housing boom, the risky subprime loans now are contributing to a record number of home foreclosures across the country, as many borrowers find themselves unable to pay the exorbitantly high interest rates that are starting to kick in after a few years of paying super-low "teaser" rates. The figures are expected to increase pressure on policy makers and the mortgage industry to move faster to contain losses and help homeowners. In recent days, regulators and lawmakers have begun suggesting that the federal government might need to take a bigger role in the mortgage business. This mortgage crisis is behind a nationwide drop in home values and a crisis in confidence that is impeding all types of lending. People who did not choose to take risks are also suffering, and more and more experts now say some sort of government response is necessary to avert a deep and prolonged recession. Though defaults increased across the country, much of the rise came from a handful of large states like California and Florida. Those two states account for about 21 percent of all mortgages but 30 percent of the new foreclosures. Nevada, Arizona, Michigan and Ohio also had high default rates.

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