A/HRC/10/7 page 7 multiple risky features were present in the same loan. No matter how far the price of housing exceeded the actual income of borrowers, so long as a borrower could be qualified for a mortgage, housing appreciation increased. Thus, loose and irresponsible lending, while not the sole cause, contributed to and enabled irrational housing price appreciation.15 12. It has been observed that beneath the subprime mortgage business and its consequences, lies an economic system “built on the drive for the steady accumulation of profit and the necessity of constant growth to provide that profit. … The development of the subprime housing market is one result: a whole new stratum of homebuyers is created, the market for homes is increased dramatically, and as long as prices continue to rise … [the fact] that the increase is based on … buying by those that cannot afford to buy is suppressed”.16 13. The system worked as long as the housing market grew and borrowers made their monthly mortgage payments. Between 2006 and 2007 the housing market stopped growing in a number of countries, credits were revaluated and in 2007 an important number of borrowers started defaulting on their mortgages. In the United States serious delinquencies (90 days or more delinquent or in foreclosure) for all subprime loans rose from 5.68 per cent in the third quarter of 2005 to 14.44 per cent at the end of 2007. In the same period, serious delinquencies for subprime ARMs quadrupled, from 5.15 per cent to 20.43 per cent.17 14. Between the summer and the fall of 2007, the collapse in the subprime market began to impact on banks in the United States and Europe which had made related investments. Governments intervened in different ways, mainly with central bank money injections, supporting specific banks and companies and in some cases even nationalizing some institutions (starting with the United Kingdom of Great Britain and Northern Ireland in January 2008). In December 2007, the United States President proposed initiatives to support also the victims of the crisis, i.e. the homeowners facing foreclosure, estimated at 1.7 million people by the end of 2007. Starting from January 2008, stock markets began to bear important losses globally and the impact of the crisis on the “real economy” was predicted by the World Bank. During the course of the year, while the prices of houses and the number of approved mortgages continued to decrease, and a growing number of banks to collapse, initiatives to address the crisis multiplied, including national rescue packages for the banking systems and central bank rate cuts. By the autumn of 2008, in many Western countries as well as in the United States, a growing number of people had lost their jobs. 15. Faced with potential catastrophe, even the fiercest critics of State “meddling” in the economy condoned massive public intervention to save private entities and markets. Some countries intervened by purchasing distressed assets, especially mortgage-backed 15 See footnote 11 above. 16 See footnote 4 above. 17 See footnote 6 above.