FBR: Subprime Foreclosures Hit 4.13%

Accelerating subprime foreclosures reached 4.13% in November, up 72% over the previous 12 months, according to a report by Friedman, Billings, Ramsey & Co.The foreclosure rate has jumped 174 basis points since November 2005, when it stood at 2.39%. Following the last recession, the subprime foreclosure rate almost reached 10% in 2002, according to the Mortgage Bankers Association. "We don't think that we will get to that level again, because we have a good job market," said MBA senior economist Mike Fratantoni. He said he does not expect another recession for several years and believes that the strong job market will keep foreclosures at a manageable level. The FBR report, based on data from subprime securitizations, also shows that the default rate on subprime loans hit 10.1% in November, up 347 bps since November 2005. (The default rate includes loans 90 days or more past due, foreclosures, and real estate owned.)