- Dubai Struggles to Ease Debt Fears; Investors Rattled
- Fannie Mae to Tighten Lending Standards: Report
- Black Friday to Avoid Red Ink; Greenback Gets the Blues
- Investing in Good Karma – and Making a Profit
- Retailers Should Believe in Christmas Miracles
- Wal-Mart Price Pressure Hurts China Workers: Report
- Bankruptcies Jump, Hitting Highest Level in Four Years
- Steepest Black Friday Discounts, Revealed
- Where Do Pardoned Turkeys Go?
- 4 Thanksgiving Week Buys For Your Portfolio: Market Pros
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Revenge of the Gangsta Nerds
- Will TCU See The "Flutie Effect?"
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
MOST SHARED
- Kuoni CEO Sees Recovery in Travel Sector
- Gold Retreats from Record High as Dollar Rebounds
- Chinese Overcapacity is Worsening, EU Chamber Warns
- Dubai Struggles to Ease Debt Fears; Investors Rattled
- Wal-Mart Price Pressure Hurts China Workers: Report
- Fannie Mae to Tighten Lending Standards: Report
- Hyundai-Kia Targets Rapid China Growth in 2010
- China Unveils Carbon Target Ahead of Copenhagen
- Great Britain, No Longer That Great: Investor
Text Size 
CNBC Assistant Web Producer
America’s most credit-worthy borrowers are defaulting on their loans faster than those with poor financial records, according to a report in the Wall Street Journal.
 |
Source: swflrealtors.com |
The rate of mortgage delinquency among prime borrowers is accelerating and could mean that banks will soon be suffering more losses from the usually safe customers than from their less-reliable ones, the report said.
The number of subprime borrowers falling down on their mortgage repayments reached 25 percent in the first quarter, but has now leveled off, with only slight increases in the second quarter, the Journal said.
Prime loans make up 80 percent of US banks’ exposure to mortgages and credit cards, and so could quickly overtake subprime borrowers in causing the biggest financial headache as the recession bites, the report added.
"The subprime pain is in the rearview mirror," Sanjiv Das, head of Citigroup's mortgage business, told the Journal.
Many of the customers with high credit scores have lost their jobs and are struggling to keep up with payments while the jobs market remains extremely weak, the report said.
The total mortgage-delinquency rate, where borrowers were late for at least one payment, rose to a record high of 9.24 percent in the second quarter, according to the Mortgage Bankers Association.
The prime borrowers showed an increase of 5.8 percent in the quarter, compared to a 1.8 percent rise for subprime customers, the report said. However, the overall rate for delinquency still remains significantly lower for prime borrowers at 6.4 percent, compared to 24.4 percent for subprime borrowers, the Journal said.
"We view this as a change in the nature of the problem. These borrowers were underwritten conservatively, and they were able to manage their payments for some period of time," Michael Fratantoni, vice president of single-family home research for the Mortgage Bankers Association, told the Wall Street Journal.
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.
- Ever wished your cab driver would stop nattering and just get to where you're going? Well that moment is near(er).
- Eric Schmidt pledges to create a virtual copy of the Iraq National Museum at Google’s expense.
- Bill Griffeth is taking a leave of absence from CNBC and Power Lunch for a year. Here's a message from Bill.
- More shoppers than ever plan to comparison-shop this season. Who will benefit?
- It may be the most unusual guide to business you'll read.
Data is a real-time snapshot *Data is delayed at least 15 minutes