Homeowners With Good Credit Falling Behind Their Payments

New York, NY (AHN) - While sub-prime borrowers who defaulted on their home mortgages appear to be leveling off, alternative-A mortgage-holders are finding it difficult to meet their monthly payments.

Alternative-A-mortgages are issued to loan applicants with good credit scores without proof of income or assets. According to analysts, the number of alternative-A mortgage-holders falling behind in their payments grew four times, to 12 percent in April, compared to a year ago. For the same period, prime loan delinquencies doubled to 2.7 percent.

Analysts said defaults are likely to grow more since the monthly payments are going up amid a decline in home prices and tighter lending standards, which makes it difficult for those with existing mortgages to refinance their loans or sell their homes.

James Dimon, chairman and chief executive of JPMorgan Chase said he expects the bank's losses on prime loans to grow three times in the coming months. Most delinquencies on mortgages usually occur three to five years after the loan was made,

Thomas Atteberry, president of First Pacific Advisors, pointed out to the New York Times, "Subprime was the tip of the iceberg... Prime will be far bigger in its impact."