For the first time since the boom of subprime mortgages in the middle of this decade, prime borrowers, or those with good credit, are making up the bulk of new defaults and foreclosures.

According to the Mortgage Bankers Association Thursday, in the first quarter of 2009, about 6 percent of all prime borrowers with fixed rate home loans were either late on their mortgage payments or in foreclosure.  And 9.12 percent of all homeowners with loans of any kind were delinquent, the highest percentage on record in the history of the MBA’s National Delinquency Survey.

While almost half of subprime or poor credit homeowners are behind on payments or about to lose their homes, this new trend with prime borrowers is more worrisome. These are the people who actually have a history of making their payments on time and using financing sensibly.

“In looking at these numbers, it is important to focus on what has changed as well what continue to be the key drivers of foreclosures,” said MBA chief economist Jim Brinkmann.  

“What has changed is the shifting of the problem somewhat away from the subprime and option ARM/Alt-A loans to the prime fixed-rate loans.  The foreclosure rate on prime fixed-rate loans has doubled in the last year, and, for the first time since the rapid growth of subprime lending, prime fixed-rate loans now represent the largest share of new foreclosures.  In addition, almost half of the overall increase in foreclosure starts we saw in the first quarter was due to the increase in prime fixed-rate loans.  More than anything else, this points to the impact of the recession and drops in employment on mortgage defaults.”

The nationwide economic troubles have meant that plenty of good credit homeowners have been laid off from their jobs and are simply left without the funds to keep current on their mortgages. And even with government programs to help modify mortgages with lower payment and interest rates, it will be hard to qualify without a secure income. The MBA predicts things will get worse before they get better. “Better” will probably happen at the end of 2010, they say.