Kiplinger: Mortgage crisis forecast

Mortgages: How Long Till Daylight?

Excerpt:

The subprime mortgage crisis is going to take most of 2008 to clear up. Hardly a day goes by without a major lender announcing a multibillion-dollar write-down on the value of mortgages and mortgage-backed securities in its possession. The cascade of bad news spells big trouble for banks' earnings in coming quarters as well as a continuing drag on the stock market and the economy in general.

In the meantime, a huge chunk of the mortgage market -- namely, subprime and other higher-risk loans -- will be frozen, sapping demand for housing and imposing continued downward pressure on the pace of construction and sales. The risky loan category rose from only 7% of outstanding mortgage debt in 2000 to almost 25% this year.

Comment: Others think it will take 2 years to clear!