Mortgage market trouble starting to hit entire economy

“Stocks plunged Tuesday as Wall Street woke up to growing problems in the mortgage market and investors became concerned that those troubles might spread to other parts of the economy. The number of borrowers who fell behind on payments hit a 3 1/2-year high, driven by an increase in delinquencies among high-risk, or subprime, borrowers, according to a report from the Mortgage Bankers Association trade group. ‘For a long time, people have been saying that the problems in the housing market aren’t big enough to have an impact on the U.S. economy, and that’s bull,’ said Christopher Thornberg, an economist at the consulting firm Beacon Economics. ‘There are a lot of secondary effects on the economy and it’s not a pretty picture’. “