U.S. Subprime Mortgage Delinquencies at 4-Year High of 13.33% (Sharon Crenson and Kathleen Howley)

  Delinquencies among subprime mortgage borrowers hit a four-year high in the fourth quarter, while home buyers who got loans with low down payments and government backing fell behind at the highest rate ever.

  By Sharon L. Crenson and Kathleen M. Howley

  March 13 (Bloomberg) -- Delinquencies among subprime mortgage borrowers hit a four-year high in the fourth quarter, while home buyers who got loans with low down payments and government backing fell behind at the highest rate ever.

  Delinquencies in all categories rose to 4.95 percent, according to the Mortgage Bankers Association, the highest level since the second quarter of 2003. The group said 13.33 percent of subprime borrowers, with poor or limited credit histories, were behind on payments in the quarter, the highest rate since the third quarter of 2002.

  ``Although the U.S. economy and the job market remain solid, the housing market continued to decelerate in the fourth quarter,'' Doug Duncan, the association's chief economist, said in the statement.

  The delinquency rates are an early indicator of mortgage defaults, which would contribute to declines in a housing market already beset by falling prices and too much inventory. The data comes as New Century Financial Corp., the second-biggest U.S. subprime mortgage lender, disclosed it is the subject of a U.S. Securities and Exchange Commission investigation.

  The lender yesterday said it doesn't have the cash to pay creditors, including Morgan Stanley, Citigroup Inc. and Goldman Sachs Group Inc.

  The Mortgage Bankers report is based on a survey of 43.5 million loans by mortgage companies, commercial banks, thrifts, credit unions and other financial institutions.

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