More borrowers at the riskier end of the market are falling behind on their mortgages and fewer are able to refinance higher interest loans, according to a report by Standard & Poors.
The credit rating agency’s survey into so-called nonconforming mortgages shows that the total “delinquency” rate for mortgages rose to a record 23.31% of the total pool as at 30 June – up from 22.17% at the end of the first quarter.
Seriously delinquent loans – those overdue by over three months – rose to 12.12% of the total. The rate at which borrowers are prepaying their mortgages – which can reflect refinancing activity – fell to 23.98% from 24.75% at the end of the first quarter.
A spokesman for S & P cautioned against reading too much into subprime delinquency rates because “delinquencies are almost a way of life for subprime borrowers”.
26/08/08 Financial Times 2
