The Real Deal Miami

As subprime delinquencies wane, concern shifts to prime borrowers

September 04, 2009 08:16AM

As the rate of delinquencies among subprime borrowers slows, concern has shifted to so-called prime borrowers, who comprise the majority of many banks’ mortgage portfolios. Data shows that the rate of delinquency for prime borrowers is on the rise. The second quarter of this year saw a 9.24 percent delinquency rate on prime mortgages, a record figure, according to data from the Mortgage Bankers Association. The association’s vice president of single-family home research and policy, Michael Fratantoni, said that this shift marks a significant change in the mortgage crisis. “We view this as a change in the nature of the problem,” Fratantoni said. “These borrowers were underwritten conservatively, and they were able to manage their payments for some period of time.”