Mortgage lending to “subprime” borrowers was always going to be risky. For a time, it was also attractive, since the risk of lending to the least creditworthy tier of US consumers was balanced by the near certainty of rising house prices – not to mention the lucrative business of selling the loans on to other investors.

Now, the risks, such as patchy credit, zero down-payments and scarcity of proof of income, are coming home to roost amid a surge in missed payments and a slowing housing market.