NOT JUST SUB-PRIME ANYMORE….The latest news from the housing bubble:

Shares of Countrywide Financial Corp. tumbled today after the nation’s biggest mortgage lender signaled that rising defaults and delinquencies are spreading beyond the troubled sub-prime market to higher-quality “prime” loans.

….Countrywide said payments were at least 30 days late at the end of second quarter on 4.56% of prime home-equity loans serviced by the company, up from 1.77% a year earlier.

Payments were late on 23.71% of sub-prime mortgage loans, up from 15.33% at the end of the same period in 2006, the company said.

This is just one data point, and it might be a blip. But the single biggest concern about the sub-prime mortgage meltdown is that it might spread to the rest of the mortgage market, and Countrywide’s problems suggest that this might be starting to happen. An increase from 1.77% to 4.56% is a mighty big jump…..

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