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From 2006 onwards, real estate markets in different regions in the US experienced declines in house prices, after a period of double-digit growth rates between 2000 and 2005. These declines in house prices, coupled with rising interest rates seriously affected the borrowers of sub-prime mortgages, with a large number of them defaulting on their loans. The high rate of defaults in sub-prime loans was seen as an indicator of the worsening situation in the housing market and the US economy as a whole. The case discusses the growth of the US mortgage market. It describes the boom period of the US mortgage market between 2000 and 2004 and the resultant expansion in sub- prime lending. It also attempts to describe the reasons behind the US sub-prime mortgage crisis in 2006-2007.