Sub-Prime Update

The Mortgage Bankers Association writes, "Sub-prime borrowers fell behind on their mortgages at the highest rate in four years in the forth quarter and delinquencies rose on all types of U.S. home loans."

U.S. mortgages entering foreclosure rose to an all time high of .54%. Sub-prime delinquencies rose to 13.33% from 12.56% in the third quarter. Overdue payments rose to 4.95% from 4.67% which is the highest number since the second quarter of 2003. These delinquency rates are an indicator of future foreclosures.

On another note, New Century Financial Corp. stated that it will not be able to pay its lenders, including Morgan Stanlel, Citigroup, Goldman Sachs, and many others. They are also under the process of criminal investigation.

Accredited Lenders' share value has dropped in half as stock holders are FINALLY realizing that mortgage lenders are the absolute last place on earth that you want your money. Accredited Lenders were forced to come up with $190 million to pay for the buy back of stocks. They are the 15th largest U.S. sub-prime lender and I would not be surprised at all to see them on the chopping block at all in the coming months.