B&C Is in Freefall.

Washington -- The subprime foreclosure rate topped 5.75% in the third quarter, a startling 140% rise from the same period last year, according to exclusive survey figures compiled by Mortgage Servicing News.

Nationwide, at least 158,494 A- to D loans that are collateralized by residential real estate have entered the foreclosure process.

Those figures likely are understated because many firms would not disclose their receivables or late payments.

At the end of September, 24.39% of all subprime mortgages were considered past due, a category that includes 30 days late through foreclosure.

A year ago the subprime foreclosure rate was just 2.39% with 20 servicers reporting to this newspaper and its affiliate the Quarterly Data Report. In the latest survey, just 10 companies reported to MSN, reflecting the fact that many firms have gone out of business.

When B&C servicers close, their portfolios continue to be serviced by a conservator that is managing the receivables. Oftentimes, those receivables are sold by a bankruptcy trustee to an ...