Forget sub-prime mortgages: the fear has now moved the next step up, to those financial stocks such as HBOS exposed to 'near-prime' mortgages. The Times, Daily Telegraph
HBOS led the FTSE 100 down, losing 45.5p to 558p, taking its total loss to 147p since revealing last week that it had £7bn exposure to such mortgages, also known as 'Alt A'.
These home loans are taken out by people with no credit history or who certify their own income. Bear Stearns pointed out that the bank has said that it has total exposure to £42bn of asset-backed securities, largely emanating from the American market.