I’ve been saying for some time that the data don’t support the myth that subprime mortgagors are defaulting on their payments because their interest rates are being reset higher. The State Foreclosure Prevention Working Group, in addition to noting that little progress is being made in reducing foreclosures, provides additional help busting this myth.

While delinquency rates increase during the early life of a loan pool, this worsening trend confirms our initial assessment that very weak underwriting and mortgage origination fraud, and not simply payment resets, has been the primary cause for elevated subprime loan delinquencies for loans originated through at least the middle of 2007.