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Washington -- The subprime default rate hit 10.52% in January, up 40 basis points in one month, but researchers at Friedman Billings Ramsey continue to predict that defaults won't breach 11% this year.
The default rate on securitized subprime loans has jumped from 6.83% in January 2006 to 10.12% in December. From October to November, the default rate surged 101 bps.
"We do not expect any further monthly surges in default rates of subprime loans of similar magnitude in the year ahead. We expect rather a slow upward drift of default rates to 10.97% by December 2007," FBR managing director Michael Youngblood said.
Mr. Youngblood made a similar statement in FBR's last monthly report, which ...
Source: HighBeam Research, B&C Defaults Approach 11%.(Brief article)