The subprime default rate rose to 10.52% in January, up 40 basis points from that of December, and the foreclosure rate on securitized subprime loans hit 4.33%, according to researchers at the investment banking firm Friedman Billings Ramsey.The default rate increased from 6.83% in January 2006 to 10.12% in December, with a monthly surge of 101 bps in November. FBR managing director Michael Youngblood said he does not expect to see another similar urge. "We expect rather a slow upward drift of default rates to 10.97% by December 2007," he said. FBR defines defaults as loans 90 days or more past due, foreclosures, and real estate owned. The investment banking firm is based in Arlington, Va.

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