New hit coming for some subprime borrowers

A new interest rate adjustment may push up payments for 13,400 Floridians whose mortgages are linked to the London Interbank Offered Rate, or Libor. Citigroup reports that 121,000 subprime borrowers nationwide could face larger payments as the rate increases, which some predict could lead to a 10 percent increase in default rates among those borrowers. Florida’s silver lining is that new adjustable-rate resets will begin tapering off in December and bottom out in the third quarter of next year, according to data compiled by First American CoreLogic.