Subprime mortgage loans considered seriously delinquent began to increase in August, while prepayments slowed amid rising short-term interest rates, according to a Friedman Billings Ramsey report released last week. Further, head ABS analyst at FBR Michael Youngblood, who authored the report, identified slight tiering among loan default frequencies from various issuers.

Overall, seriously delinquent adjustable-rate subprime mortgages crept up in August compared with the preceding month, with the 2000 vintage showing a 3.55% uptick to 20.4%; the 2002 vintage rising 2% to 10.1% from 9.98%; 2003 increasing to 6.48% from 5.93%; 2004 to 2.90 from 2.57% and this year's vintage increasing to 0.83% seriously delinquent from 0.62% in July.

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