It turns out that massive interest rate spikes aren’t the problem — many borrowers couldn’t afford these mortgages even at the low, introductory interest rates.

Les Christie, CNNMoney.com

For months, we’ve fretted about the Armageddon that will hit when subprime adjustable rate mortgages start resetting to much higher interest rates.

What’s happening is even worse: Many of these loans are defaulting well before their rates increase.

Defaults for subprime loans issued in 2007 - none of which have reset yet - hit 11.2 percent in November. That represents perhaps 300,000 households, and is twice the default rate that 2006 loans had 10 months after being issued, according to Friedman, Billings Ramsey analyst Michael Youngblood.

To view all of this article, please visit this link at CNNMoney.com