Fed: B&C, Piggyback Loans Rose in '06

Subprime and piggyback lending constituted a slightly higher percentage of mortgage originations in 2006 than in 2005, according to Home Mortgage Disclosure Act data released by the Federal Reserve Board.The HMDA data show that 28.7% of mortgages originated last year were "higher-priced," or subprime, up from 26.2% in 2005. The Fed also said piggybacks, in which a first mortgage and a second lien are originated simultaneously, were used in 22% of home purchase transactions, about the same as in 2005, but that more second liens were reported. "In 2006, lenders covered by HMDA reported about 1.43 million junior liens to purchase homes, almost all conventional loans, and a number about 4% greater than in 2005," the Fed said.