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Lenders See New Wave of Prime Defaults

Bigger group of 'good' borrowers now face foreclosure

By Jim O'Neill, Newser User

Posted Aug 4, 2008 8:11 AM CDT

(Newser) – The flood of foreclosures on subprime mortgages seems to be ebbing, the New York Times reports, but a second, larger group of borrowers—those with better credit—are now expected to default in coming months. A continued weak economy, unemployment, and other economic factors helped to quadruple the percentage of borrowers one rung above subprime who defaulted in April, compared with the year before, and double the percentage of prime market borrowers who defaulted.

Problems in the broader mortage market may continue to climb for as long as 2 years, analysts predict, as monthly payments continue to rise and home values fall. Tightened lending standards will make it harder for people to refinance loans or find buyers for their homes. “Subprime was the tip of the iceberg,” says one. “Prime will be far bigger in its impact.”

A bank owned home is seen for sale in Sacramento, Calif. (AP Photo/Rich Pedroncelli, file)

A pedestrian walks past a house bearing a lender foreclosure sign in Shaker Heights, Ohio. (AP Photo/Tony Dejak)

A lender foreclosure sign is seen in front of a house, Thursday in Shaker Heights, Ohio. (AP Photo/Tony Dejak)

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Lenders See New Wave of Prime Defaults

Bigger group of 'good' borrowers now face foreclosure

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subprime crisis • mortgage defaults • JPMorgan Chase • foreclosures

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More Newser Stories

2007 Mortgages Failing at Triple the Rate of 2006

Prime loans made in early 2007 are going bad at triple the rate of 2006 loans

Goldman Seizes Homes as Securities Sour

Just getting them to admit they hold your mortgage can be an ordeal

Fannie Mae: Tenants Can Stay

Fannie Mae won't evict tenants after foreclosures

FDIC Pushes Plan to Ease Mortgage Payments

Bush camp opposes using bailout funds

Citi to Aid Homeowners by Modifying $20B in Mortgages

The bank will amend mortgages to assist 130,000 borrowers

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Lenders See New Wave of Prime Defaults

Bigger group of 'good' borrowers now face foreclosure

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OTHER STORIES ON OUR RADAR

subprime crisis • mortgage defaults • JPMorgan Chase • foreclosures

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

2007 Mortgages Failing at Triple the Rate of 2006

Prime loans made in early 2007 are going bad at triple the rate of 2006 loans

Goldman Seizes Homes as Securities Sour

Just getting them to admit they hold your mortgage can be an ordeal

Fannie Mae: Tenants Can Stay

Fannie Mae won't evict tenants after foreclosures

FDIC Pushes Plan to Ease Mortgage Payments

Bush camp opposes using bailout funds

Citi to Aid Homeowners by Modifying $20B in Mortgages

The bank will amend mortgages to assist 130,000 borrowers

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?