Blown Mortgage

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Well hold the presses!  Wouldn’t you know - subprime defaults continue to increase!  Somebody, tell your friends - the terribly underwritten subprime loans brought to the market courtesy of New Century, Fremont, and the rest of the imploded subprime cartel continue to sour by the day.  Bloomberg reports:

Late payments and defaults among subprime mortgages packaged into bonds rose last month, according to data for loans underlying benchmark ABX derivative indexes.

After August payments, 19.1 percent of loan balances in 20 deals from the second half of 2005 were at least 60 days late, in foreclosure, subject to borrower bankruptcy or backed by seized property, up from 17.5 percent a month earlier, according to a report yesterday from Wachovia Corp.

Prepayment speeds for the loans slowed, suggesting it’s more difficult for borrowers to sell their homes or refinance, according to another report by New York-based analysts at UBS AG. Record levels of delinquencies and defaults on subprime mortgages are worsening as home prices decline and interest rates on loans adjust higher for the first time. As lenders tighten standards, borrowers are finding it harder to refinance into new mortgages with lower payments.

The “reports showed the first inkling of the impact of shutdown of subprime market,” the UBS analysts led by Thomas Zimmerman wrote late yesterday. “In our opinion, the full impact is yet to come.”

Thank you Mr. Zimmerman for the aphorism that should be echoing around our country “…the full impact is yet to come.”  For every talking head that calls bottom please, someone please, send them to Mr. Zimmerman or any one of the sane people who have the ability to analyze data and make rational assumptions based on fact.  Sorry for the exasperation, but if you had to spend your day listening to people make up stories about why we’re at the bottom of the market with out anything but opinion to back up their fallacies you’d be exasperated too.

When do you think we’ll see bottom?

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