Since early in 2007, the U.S. mortgage lending bubble has been deflating. Subprime lenders (those who lend to the riskiest, least-creditworthy debtors) have been especially hard-hit--with some of the largest lenders entering bankruptcy--and the stock of easy credit which fueled the housing boom is vanishing. AEI scholars, including Desmond Lachman, John H. Makin, and Alex J. Pollock, have been examining and analyzing the situation, offering insights on the source of the bubble, why it is bursting, the consequences for the U.S. and global economies, and what a proper government response would look like. Below are links to relevant articles on the crisis, as well as a related conference on the subject.

Mortgage Credit and Subprime Lending: Implications of a Deflating Bubble
Conference, Wednesday, March 28, 2:00-4:00 p.m.
Speakers: Desmond Lachman, Alex J. Pollock, Nouriel Roubini, R. Christopher Whalen, and Thomas Zimmerman

"Risk and Return in Subprime Mortgages," by John H. Makin
Economic Outlook, March 2007

"Subprime Time," by Alex J. Pollock
Article on American.com, March 8, 2007

"The Fed Is Not Asking the Right Questions," by Desmond Lachman
Article in the Australian Financial Review, March 9, 2007

"Credit Crack-Up," by Alex J. Pollock
Article in the Wall Street Journal, March 12, 2007

"Subprime Mortgage Scandals and Lawsuits Are a Certainty," by Alex J. Pollock
Letter to the editor in the Financial Times, March 16, 2007

"The Consequences of Subprime Turmoil," by Desmond Lachman
Letter to the editor in the Financial Times, March 20, 2007

"Housing Market Blues," by Desmond Lachman
Article on TCS Daily, March 23, 2007

"Recession in 2007?" by John H. Makin
Economic Outlook, April 2007