Subprime mortgages are by definition the pervasive practice of making loans at higher interest rates and more aggressive payback terms to those with lower credit, typically to borrowers with credit scores significantly below 620 on the FICO score scale. Subprime mortgages also include escalation clauses and have highly creative features including balloon payments to entice borrowers into exceptionally low payments at the beginning of the loan period only to exponentially grow over time to three or more times the original amount. As these subprime mortgages are initially very affordable for many middle class Americans, today approximately 10% of all mortgages in the U.S. today are of this type. Consumer rights advocates have argued that due to the unrealistically low interest rates there are 5 million or more loans of this type in existence today, with maturing rates within the next three years. It is expected that the worst of the subprime mortgage crisis has yet to be felt in the economy, as $400B in loans are resetting this year (2007) and $500B in 2008. The majority of these loans will reset in March, of 2008, when in that month an estimates $100B in adjustable rate mortgages will reset to higher interest rates. It is expected that 90% of those households with subprime mortgages will see a reset to a higher interest rate by the end of 2008. What has marked the subprime mortgage market is the creativity in loan packaging. Interest-only mortgages where interest-only payments are made for the initial years of the loan (2, 5 or 10 years), initial fixed-rate mortgages that convert to variable rates, which include the popular 2-28 loan that is 2 year fixed then 28 year adjustable mortgage, and the Pick A Payment loans where the borrower defines if the payment is going for interest only, thereby making the payment much more affordable for lower income borrowers are examples of the extent of loan programs and the obvious financial ri...