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by CareyBot

Editor's note: Steven Krystofiak offers an insider's take on what's been unfolding in the subprime mortgage industry. Read Krystofiak's previous articles, "What is a subprime loan? It depends on whom you ask"; "High-risk loans enable buyers to obtain, not afford, homes"; "Why home-ownership shortcuts will lead to longer recovery"; and "Sales pitch all smoke and mirrors.") Trillions of dollars of short-term fixed mortgages that will reset in 2007 and 2008 are just the primer and the beginning for a real estate downturn that will take real estate prices into an extreme dive beginning in late 2008. And the recovery will not come until Iraq is a family vacation destination. The culprit for the extreme dive will be negatively amortized loans. The hardest-hit area will be California. Let me expl...