Countrywide Mortgage Sees Late Payments Surge

Countrywide Financial Corp., the largest U.S. mortgage lender, said payments were at least 30 days late on 2.9 percent of prime home equity loans serviced by the company.

That’s up from a slim 1.6 percent just one year earlier and 0.8 percent of all Countrywide mortgage transactions at the end of 2004, according to Business Week.

This report comes at a time when more and more U.S. home mortgage companies are scrambling amid rising defaults and slower home sales.

The Calabasas, Calif., lender said in a Securities and Exchange Commission (SEC) filing that payments were late on 19 percent of its subprime (bad credit mortgage loans), compared with 15.2 percent at the end of 2005 and 11.3 percent at the end of 2004.

The Wall Street Journal has a similar report published report on its Web site. Subprime loans are for borrowers with weak credit records, and have mortgage rates typically 2-3 percent higher, on average.

First American LoanPerformance, a research firm in San Francisco, also show a rising trend in late payments. The firm said payments were at least 60 days late in December on about 14 percent of subprime loans packaged into mortgage securities, up from 8.3 percent a year earlier.

For Alt-A mortgages, a category lenders use to designate the area that falls between prime and subprime, the rate increased to 2.4 percent from 1.2 percent.

SOURCE: Business Week