I am still trying to wrap my head around all of this and wonder if you (or someone) can provide some information that would be germane to your thesis.

What are the characteristics of the defaulted mortgages? Gross mentioned that a large % are in SoCal and other high priced markets. What about the size of the mortgage? Are these 100K homes, 300k, or million dollar homes? Specifically, I would like to know the modal size of recent defaulted mortgages?

My take on all of this is that these subprime mortgages were designed to help developers sell bigger and bigger homes, and throw fuel on the home price fire in places like SoCal. Some fam and friends live in SD, where two bedroom bungalos in Pacific Beach were selling for close to a million dollars. Vegas also had a boom of rediculously high priced homes (one story I heard was that people were buying 2 houses with interest only loans and expecting to flip one of them within a year). The defaults that I know about are in this category-hardly inner city minority borrowers.