The talk about the troubled subprime mortgage industry has dominated virtually every media outlet for the past month.

Foreclosures and delinquencies have caused a wave of panic to ripple through the whole industry.

Subprime loans are given to borrowers with bad credit and have higher than normal interest rates. They are also the ones that are most notorious to default or end up in foreclosure.

There is not only an increase in the amount of foreclosures and delinquencies lately, but we have also seen subprime lenders struggle with the times and go out of business.

But as the troubles within the subprime industry continue to unfold, many are left wondering if the troubles will spill over to the “prime” mortgage market.

These prime loans are the most favorable types of loans and are reserved for the consumers with the best credit scores.

As of right now, economists and analysts are starting to get worried that the subprime market’s troubles could negatively affect the prime market.

A recent article on CNN.com by Les Christie, “For mortgage market, it’s prime’s time,” discusses the current mortgage situation.

“The meltdown in the subprime mortgage market is making it tough for many potential home buyers to find financing. Home buyers with damaged or thin credit histories may be shut out. But what about people with the best credit? Will the problems in subprime have any impact on how costly or easy it is to get mortgages for so-called prime borrowers?”

There is no doubt that future borrowers with bad credit will definitely be affected by this, since new lending standards are already starting to go into action to prevent something like this from ever occurring again.

But in the mean time, due to the severity of the problems, we could see the problems slowly seep into the part of the industry that was supposed to be unaffected.

“Jay Brinkmann, economist for the Mortgage Bankers Association, says subprime problems may ‘bleed over’ into prime.”

“As evidence of this he cites ‘a general increase in credit spreads across the board.’ When the supply of money for loans falls, credit spreads - the difference between what lenders pay in interest versus what they get from borrowers - tend to rise, making all loans more expensive, including prime.”