Standard & Poor's credit analysts expect higher levels of defaults this year as performance of prime jumbo loans continues to deteriorate.

"Most losses in subprime and riskier alt-A mortgages have been taken, but we still expect more losses in the prime jumbo market due to economic reasons and seepage into the traditional prime conforming market," an S&P report said.

The report showed that 6.7% of jumbo loans originated in 2006 and 2007 are 90 days or more past due, in foreclosure or real estate owned as of April 30.

"While jumbo borrowers generally have better jobs and more wealth, "we think many are being overcome by the economic conditions (job losses) and asset-value depreciation that we believe is causing worst-than-historical performance in this asset class," the S&P analysts said.

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