These assumptions unraveled quickly once the housing market turned in late 2006 and loan performance worsened. By end-2009, the Case-Shiller single family homes index had fallen by 30 percent and the unemployment rate had doubled relative to their levels at the peaks of the housing and business cycles. Data from the Mortgage Bankers’ Association of America indicate that by end-2009 over 4½ percent of all mortgage loans, (including more than 3 percent of conforming conventional loans), were in the foreclosure process. Securitized loans fared worse with over 11½ percent, (18 percent of subprime and 14 percent of Alt-A), having entered.
