A new World Bank working paper called The Sub Prime Crisis: Implications for Emerging Markets makes an argument that the world may not quite be ready to hear, at least not so soon after the implosion of Wall Street. Authors William Gwinner and Anthony Sanders delicately explain in the abstract that "[i]t is possible to extend mortgage lending down market [in emerging markets] without repeating the mistakes of the subprime boom and bust." You don't have to start worrying about this question quite yet, though. Subprime mortgages still seem to be pretty rare in emerging markets:
[E]merging markets have been slow to move down market with mortgages. Mortgage lending is typically less than 20 percent of GDP in emerging markets, while it ranges between 40 and 100 percent of GDP in developed countries.
The authors lay out a lot of "lessons learned" that could help guide policymakers in emerging markets. Perhaps it would make good reading for policymakers in the U.S. as well!
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