Millions of over-extended Americans can’t pay their mortgages, and it’s shaking out the mortgage industry. ResMAE Mortgage Corp., who threw in the towel this week, is just the latest of several high-risk U.S. home lenders to file for chapter 11 recently.

HSBC, one of the biggest sub-prime lenders of all, warned this week that mortgage defaults in its U.S. division will be 20% worse than expected. Not surprisingly, shares of U.S. sub-prime lenders have been getting hammered.

How bad is it south of the border? Over 10% of sub-prime U.S. mortgages are more than 90 days late. The Center for Responsible Lending Nearly says one in five of sub-prime loans will be foreclosed, putting 2.2 million Americans on the street.

Fortunately the picture in Canada is a lot brighter. Whereas 24% of mortgages in the U.S. are deemed “high-risk,” only 5% of Canada’s fit that bill. CIBC, however, expects Canada’s sub-prime ratio to double in 3 years.

Notwithstanding all of the above, it’s worthy to note that sub-prime loans do serve a purpose. In the past year alone, sub-prime mortgages have allowed 85,000 lower income (or credit-challenged) Canadians to purchase their homes instead of being forced into renting.