Are B&C Delinquencies Falling?(subprime mortgage delinquencies )

Subprime mortgage delinquencies declined modestly in the fourth quarter of last year, but the trend still may be toward higher delinquencies, according to data compiled by LoanPerformance here.

While the serious delinquency rate on subprime loans, after tapering off late last year, may be heading up again, the San Francisco-based research firm said that early indications are that loans originated last year are performing better than their peers.

In fact, LoanPerformance senior vice president Sheila Meagher says that the book of subprime loans originated in 2002 "appears to be the best performer of all recent vintages."

At the 12-month mark, loans originated last year have a serious delinquency rate of 1.08%, a 38 basis point improvement from the 1999 vintage's rate at a similar point in time. Early delinquencies are often harbingers of a vintage's long-term performance.

Overall, serious delinquencies on subprime loans were down in the fourth quarter of last year, falling by 15 basis points from the third quarter to 6.81% in the fourth, according to LoanPerformance. However,

Ms. Meagher said the serious delinquency rate has started to edge back up according to numbers LoanPerformance has received early this year.

And some states and cities continue to see rising levels of subprime delinquencies. Wisconsin, Mississippi and Illinois experienced large increases in subprime delinquencies in the fourth quarter, according to LoanPerformance.