The subprime market has officially imploded. Fremont General has physically closed its doors in their Orange County offices while looking for a buyer for their subprime lending unit. New Century is facing possibly criminal charges. Stocks of Fremont, New Century, Novastar, Countrywide and other subprime lenders have dropped like the world coming to an end. New Century went from a little over $30 to $15 to under $5 in less than a month.

Most experts saw this coming. Heck, it doesn’t take an expert to see this coming. It is only common sense to realize that someone making $30,000 a year can’t afford to pay for a $600,000 home. Even at $90,000, a mortgage for a $600,000 home will be tough.

I don’t think we have seen the worse yet as there will be certainly borrowers  with good credit will stretched the truth in their loan application in order to afford a $800,000 home.

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