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The Morning Call in Allentown, Pa., produced a nice piece on the subprime lending crisis that is becoming more visible by the month. By way of background, the Federal Reserve Board says:

About 7 1/2 million first-lien subprime mortgages are now outstanding, accounting for about 14 percent of all first-lien mortgages. So-called near-prime loans -- loans to borrowers who typically have higher credit scores than subprime borrowers but whose applications may have other higher-risk aspects -- account for an additional 8 to 10 percent of mortgages.

But now, many of those loans are crumbling. The Federal Reserve chairman, Ben Bernanke, said it could be a $100 billion problem.

You think this won't affect you? You may be mistaken. Look at this passage from The Morning Call:

In the majority of cases, they got 30-year loans in which the payment held steady for two years before the interest rate readjusted -- usually upward -- costing the borrowers more. Even that riskiest class, known as '"subprime"' borrowers, received millions of new home-buying loans, home equity loans or lines of credit with similar terms.

Whatever the type of loan, the interest rates are now rising for millions of borrowers, leaving many near or at the breaking point as higher payments overwhelm their family incomes and trigger an increasing wave of foreclosures.

Watching the crash from the sidelines are the largely unregulated mortgage brokers who lined up the borrowers with a loan, collected fees and washed their hands of the deals. In many cases, the original lenders no longer have a direct stake in the transaction either, having sold off the mortgage to Wall Street investors.

Some observers are predicting massive losses for foreclosed homeowners and the lenders stuck with the properties. One study estimates 2.2 million subprime loans made in recent years, worth $164 billion, will blow up. And the wave of misery now washing over the real estate industry, investors and Wall Street will crash squarely on the backs of the borrowers, leaving them with ruined credit, bankruptcies and the likelihood that they'll lose their homes.

The Boston Globe tells the "so what" part of the story. Even if your loan payments are going just fine, the subprime mess may well mean the value of your home drops. The article states:

That so many homeowners are having such trouble meeting their mortgage payments could very well mean your own home's value has dropped, that you may not be able to get a home-equity loan, or that your retirement savings will grow more slowly than you planned. Conceivably, it could even mean that the global financial system -- and by extension the economy and even your job -- is threatened.

The current mortgage mess has many causes, but none is more important than the abuse of an arcane process called securitization. In recent decades, creative bankers developed financial securities whose value was derived from homeowners' mortgage payments.

What was new was that, like coffees in a gourmet shop, these securities came in various strengths. Depending on their stomach for risk, investors could have theirs mild or intense. Plain-vanilla pension funds could obtain safer (but lower) returns, while edgier hedge funds accepted bigger risks in pursuit of higher yields.

What is "subprime?" Bankrate.com explains:

Generally, subprime mortgages are for borrowers with credit scores under 620. Credit scores range from about 300 to about 900, with most consumers landing in the 600s and 700s. Someone who is habitually late in paying bills, and especially someone who falls behind on debts by 30 or 60 or 90 days or more, will suffer from a plummeting credit score. If it falls below 620, that consumer is in subprime territory.

Few lenders will use the term "subprime" to describe you or your loan, because it's considered bad salesmanship. You might hear the word "non-prime" or, more likely, an adjective won't be used to describe the mortgage at all.

Will subprime loans force tighter lending policies? Here is some background:

But there were calming words from Federal Reserve Chairman Ben Bernanke, who said during congressional testimony that while there will be significant losses from the subprime market, he still views them as bumps along the road. And economists agree that losses from subprime mortgages won't likely trigger a systemwide credit crunch.

In a month or so, The Sacramento (Calif.) Bee will begin publishing video letters to the editor online.

There is a lot to work out, the paper admits. In brief, by using YouTube or related sites, readers could make videos and e-mail them to the newspaper. The main task right now for editorial pages editor David Holwerk and his editorial colleagues is to determine how the process will work. At the moment, there are many more questions than answers. Here are a few of the questions being addressed:

What are the content rules, other than no nudity and profanity? How many times can someone submit a video? Because of heavy volume, readers are restricted to one letter a month. But at sacbee.com, in contrast, there's no limit on how often readers can post online comments about stories.

How long should a video run? Should the paper edit the videos? Holwerk thinks it's probably better, easier and more efficient to either accept or reject a video, and forget about editing.

Should the topics be restricted to local and state issues, or should any topic, such as the war in Iraq, be considered appropriate? Right now, again because of heavy volume, printed letters are taken generally from people who live in the Bee's circulation region, meaning those from other parts of California or the country are excluded. Should that edict hold?

Trash May Not Be So Private

Once you set your trash out on a public right of way, like a curb or sidewalk, you may be losing legal control over it.

Now imagine a reporter comes and lifts it to see what you have been up to. What about cops who go through your trash to see if, maybe, you have been cooking up meth?

Should your trash be private?

Editor's Note: Al's Morning Meeting is a compendium of ideas, edited story excerpts and other materials from a variety of Web sites, as well as original concepts and analysis. When the information comes directly from another source, it will be attributed and a link will be provided whenever possible. The column is fact-checked, but depends on the accuracy and integrity of the original sources cited. Errors and inaccuracies found will be corrected.