More news this week that the whole subprime mortgage business is in trouble with home prices stalling out. In recent years lenders have developed all kinds of ways of financing people with lower incomes and poor credit histories. For enough interest, you didn’t even need documentation or you could get a loan where the principal didn’t really need to get paid until … well whenever.

Now many of those loans have turned sour, reports the New York Times. Well, no excrement, Sherlock.

Subprime borrowers are experiencing the worst delinquency and foreclosure rates. A professor from the Wharton School notes “These populations are spatially concentrated.” That’s a fancy way of saying that most of these loans are made on homes in poor and minority neighborhoods. Almost six million such loans were outstanding at the end of June. And the problems are worse where the economy is weakest.

Subprime loans are a booming part of the industry. They’ve gone from less than 2 percent of home loans to more than 13 percent in just five years. Lenders have been aggressively marketing and trading the loans because their higher interest rates make them far more profitable than prime loans. That’s why Wells Fargo has been getting more of them, as the Los Angeles Times reports. The plan is that the mortgages will open the door to other banking services such as checking accounts and credit cards.

The San Francisco-based bank is now well ahead of subprime champ Ameriquest and analysts see a big future in its cross-selling strategy. The bank promises it will offer financial education as part of its expansion in the subprime mortgage market.

But the decline in the subprime mortgage market has taken its toll. Ameriquest could be closed or sold very soon, reports the Times. With a business so dependent on a shaky segment of the market and the regulators pounding it with a $325 million fine for churning accounts to collect fees from uninformed borrowers, the lender is on the way out. How the mighty are fallen!