FBR: April B&C Defaults Jump

The default rate on subprime mortgages jumped 55 basis points in April to 12% -- the highest level since 1997, according to a report by Friedman Billings Ramsey, Arlington, Va."The default rate has climbed to the highest level since August 1997 (13.42%), which was the peak of the prior decade," says the monthly report by FBR Investment Management Inc. The default rate on securitized subprime loans rose to 11.99% in April from 11.44% in March. FBR researchers noted that there are metropolitan areas of California, Arizona, Florida, Nevada, and the District of Columbia that have seen default rates increase by more than 200% since April 2006. The default rate on alternative-A loans rose 22 bps in April, to nearly 2.48%. (The default rate includes loans 90 days or more past due, in foreclosure, and real estate owned.) FBR can be found online at http://www.fbr.com.