FORT WORTH (PRWEB) April 3, 2007
Upheaval in the subprime credit sector continued last week, as at least one subprime lender said it will be laying off employees, and another is having trouble finding a buyer.
First NLC, a top-25 subprime lender owned by Friedman, Billings, Ramsey Group, Inc., said late Friday it will be laying off staff as it consolidates operations. FBR had previously said it was looking for a buyer for the subprime outfit. (http://www.housingwire.com/2007/04/01/commentary-more-subprime-layoffs/)
H&R Block, which owns Option One mortgage - one of the nation's largest subprime operations - said it was having trouble selling the lender. The company had originally targeted the end of March for a sale, but faulted current conditions in the subprime market as the chief culprit behind the delay. Sources suggested that it now may be one year or more until a sale is completed.
Fears that problems in the subprime industry might be spreading received some fuel in the form of a report from rating agency Moody's Investors Service, which said that credit performance in prime jumbo mortgages continued to deteriorate during the fourth quarter of 2006. Delinquencies were reported to be up more then 50 percent among prime borrowers compared to the third quarter of 2005.
Meanwhile, fellow agency Standard & Poor's reported that subrpime residential mortgage-backed securities issued in 2006 will likely exhibit the worst performance in seven years, with losses in the vintage mirroring levels not seen since 2000. "The number of total and serious delinquencies for the 2006 vintage is consistently higher than for deals issued between 2001 and 2005," said credit analyst Michael Stock, a director in the U.S. RMBS ratings group at Standard & Poor's. (http://www.housingwire.com/2007/03/27/sp-subprime-rmbs-losses-will-rival-2000-vintage/)
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