U.S. mortgage crisis spreads beyond subprime loans

NEW YORK: The U.S. credit crisis is no longer just a subprime mortgage problem.

As the world’s largest economy grapples with the worst housing slump in two decades, people with good credit histories are falling behind on house payments, auto loans and credit cards at an accelerating pace.

The problem, spurred by a sharp decline in home prices and a clampdown on loans by banks, poses a new a threat to the housing market and weakening economy, which some specialists say is in a recession or headed for one.

The Bush administration, scrambling to keep the U.S. economy from skidding too sharply, on Tuesday released a plan to help qualified homeowners in distress hang on to their homes.

The initiative was announced as Warren Buffett, the billionaire investor, offered to reinsure the municipal bond portfolios of three troubled bond guarantors, a move that, together with the Bush plan, bouyed Wall Street investors searching for any good news about the troubled mortgage market.

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