New York Times (08/04/08) P. A1; Bajaj, Vikas
With subprime mortgage defaults appearing to stabilize for the first time in two years, experts predict another round of trouble is on the way as the credit crisis impacts borrowers with healthy credit. Delinquencies on Alt-A and prime mortgages have risen dramatically in recent months, and some believe this round of defaults could be bigger than the last. Many of these borrowers were making interest-only payments or even less; and given that they owe more than their homes are worth, a substantial number of these borrowers will be unable to make interest and principal payments or sell their homes. Experts say this round of defaults will hit banks harder than the subprime fallout, given that they traditionally carry more prime loans on their books.
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