Business Insight Zone

The other day we were talking about the ouster of New Century Financial’s CEO. Today the New York Times has a story by Vikas Bajaj about how delinquencies and foreclosures are going up among mortgage holders with subprime credit. But things aren’t so bad across the board:

The delinquency report presented a mixed picture. It indicated that more homeowners with tarnished, or subprime, credit are likely to have trouble making house payments, especially as interest rates rise. But it also suggested that, at least so far, the problems have not extended very far into the larger pool of prime borrowers, whose interest rates are lower because of their stronger credit.

The trouble in the subprime market has hardly been limited to previously little-known lenders like New Century; it has also depressed the earnings of big financial firms like Goldman Sachs and Bear Stearns, as this MarketWatch story details. If you’re interested in seeing just how pervasive the trouble in the subprime business has been, check out this handy chart from the Wall Street Journal: Subprime Shakeout.