Past Due Subprime Mortgage Payments At Record High

Source: Reuters

SAN FRANCISCO, April 4 (Reuters) - The percentage of home owners with subprime mortgages who are dangerously falling behind on monthly home loan payments rose to a record high in February, according to a First American LoanPerformance report provided on Wednesday to Reuters.

Some analysts said the delinquencies would continue to climb, adding to troubles in the subprime mortgage industry.

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"It's going to get worse," said Richard DeKaser, chief economist for National City Corp., a Cleveland, Ohio-based bank holding company. "Whether delinquencies, foreclosures, what have you, there will be further bad news as the year plays on."

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According to San Francisco-based First American LoanPerformance, 12.4 percent of all subprime borrowers were at least 60 days late on their mortgage payments in February -- the highest level the First American Corp. (FAF.N: Quote, Profile , Research) mortgage research unit has recorded since it began its data series on the loans in 1989.

Read more: http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-04-04T210934Z_01_N04370379_RTRIDST_0_USA-SUBPRIME-DELINQUENCIES.XML&pageNumber=1&imageid=&cap=&sz=13&WTModLoc=InvArt-C1-ArticlePage1

when you're behind on your payments, your not necessarily spending a bunch of money on other things.

when they find themselves (directly or indirectly) holding a lot of housing in a depressed market intead of 'collateralized loans' that they have (had) on the books. Could lead to some tightening of credit, as banks try to get their deposits/loans ratios back into legal range.

There's a lending giant that's about to bite the dust. It specializes in subprime lending. When that company topples, it's going to reverberate around the world; it will hit the mortgage industry in more countries than just the US.

More fuel to the fire: Fannie Mae has HUGE accounting discrepancies. They are already aware that this quasi-governmental entity has UNDERSTATED its earnings for the past decade. It's so unbelievable. They're frantically working behind the scenes to keep this one from exploding.....just like ENRON.

The real estate "industry" is about to take a big hit.