“Subprime” is the 2007 “Word of the Year,” according to a recent article on MSNBC.

It’s a dubious distinction because subprime, according to the The American Dialect Society, is “a risky or less than ideal loan, mortgage or investment.”

Here’s a snip from Professor Wayne Glowka:

“When you have investment companies losing billions of dollars over something like
bundled subprime loans, then you have to consider whether it’s important. You probably also want to think about paying off that third mortgage.” 

Bad subprime loans are a big reason behind the growing foreclosure problem throughout the United States. Homeowners received loans that were either unaffordable from the get-go or were structured with “ballooning” interest rates a few years down the line.

And once those interest rates kick-in, and monthly mortgage payments are all of a sudden much higher, more and more homeowners are feeling the financial pinch.

Here’s to hoping that 2008 is not more of the same.

The big news over the past few weeks has been the subprime mortgage issues with lenders such as Countrywide Financial Corp. — the nation’s largest mortgage lender — going through a major credit crunch.

In fact, Countrywide stock has lost half its value and there are major layoffs in the works.

At Foreclosure.com, we have not noticed an increase in foreclosure listings as a result of this supposed collapse in mortgages. For the most part, we have seen our active base of listings go up (the current listings on our site are remaining active and not being purchased), but we have not seen the new foreclosure listings increase at all.

Our foreclosure numbers have experienced a slight increase, however, because of the active listings remaining on the Web site longer. But that is all we have seen at this point.

Over the next few weeks we will find out whether or not this has been a true crisis with subprime foreclosures or it has been overblown. To monitor the situation yourself just check out our homepage — we post the current active foreclosures there each day. And as August 19, 2007, we have about 183,225 active foreclosure listings throughout the United States.

Stay tuned.