Its been seen coming. The housing crisis has not only affected subprime but also non-subprime homeowners, as Countrywide has lately been telling the news.

While the signs are still tentative, EPDs (Early Payment Defaults) and the number of foreclosures have increased dramatically. In some areas, foreclosures have risen as much as 700%. Early this year there have been increasing signs of Alt-A loans defaulting. The increase has caused a lot of pain for investors in mortgages, mortgage companies and homeowners that are in difficult loans.

Unfortunately, delinquencies on Alt-A loans have been rising much faster than subprime in recent months, making these scary for the general economy. At one time, bankers and some policy makers expected that the subprime crisis would be contained and not spread. The threatening problem is that if Alt-A follows in the same path as subprime, many homeowners might be forced to sell their homes because of less available financing.

In addition, there is a backlog of homes sitting for sale and with the increasing supply from home builders, foreclosures and the people that need to sell, it’s going to be a tough battle to get a home sold. For many that signed into an exotic loan, they may even feel that their single largest asset is now worth less than they can sell or refinance at.

How will the economy be affected? With more introductory rates resetting to a higher interest rate, many will curb spending, which will undermine economic growth and employment.

Quite a few economists belief that the crisis is far from over. Subprime was hit hard last year, now Alt-A….and from what’s been heard, prime is starting to show some issues.