Pace Of Delinquencies For Prime Borrowers Exploding Higher……………
Posted By thestatedtruth.com on September 3, 2009
More Pain Felt by ‘Prime’Borrowers
- By ROBIN SIDEL
- SEPTEMBER 4, 2009
The long recession and rising joblessness are taking an increasing toll on the nation’s most credit-worthy borrowers, who are now falling behind on their mortgage and credit-card payments at a faster pace than people with poor financial histories.
The mortgage-delinquency rate among so-called subprime borrowers reached 25% in the first quarter but appears to be leveling off, rising only slightly in the second quarter. The pace of delinquencies for prime borrowers is accelerating. Since prime loans account for 80% of U.S. bank exposure to mortgages and credit cards, these losses could ultimately exceed those from weaker borrowers.
“The subprime pain is in the rearview mirror,” says Sanjiv Das, head of Citigroup Inc.’s mortgage business, which is seeing delinquencies rise among prime borrowers, who make up three-quarters of its mortgage portfolio.
In many cases, these “prime” customers, whose high credit scores afforded them the best interest rates on mortgages and credit cards, lost their jobs over the past few months and only now are running out of temporary fixes that have been keeping them afloat.
“People who are middle-class wage earners initially may have severance pay and think they have plenty of time to find a job, but then they start using credit cards to support living expenses,” he says.  More…………. www.wsj.com
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