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Late Loan Payments Rise At Countrywide

Countrywide Financial, the largest U.S. home mortgage lender, reported a sharp increase in late payments, including those for loans by borrowers with relatively strong credit records.

Payments were at least 30 days late on 2.9% of prime home-equity loans serviced by the company, up from 1.6% a year earlier and 0.8% at the end of 2004, the company said in a filing with the Securities and Exchange Commission.

Late payments were even more common for subprime loans, which are made by borrowers with weak credit records, the Calabasas, Calif., lender said. Payments were late on 19% of its subprime mortgage loans, compared with 15.2% at the end of 2005 and 11.3% at the end of 2004.

The filing was reported by The Wall Street Journal. The paper noted that the increase in Countrywide's rate of late payments comes amid increasing anxiety about a surge in late payments on subprime loans, which it said accounts for about a fifth of all new home mortgages granted last year.

First American LoanPerformance, a research firm in San Francisco, also show a rising trend in late payments, according to the paper.

First American said payments were at least 60 days late in December on about 14% of subprime loans packaged into mortgage securities, up from 8.3% a year earlier. For Alt-A loans, a category that falls between prime and subprime, the rate increased to 2.4% from 1.2%.