Credit-worthy borrowers in subprime flap

NEW YORK, July 26 (UPI) -- Credit-worthy borrowers are beginning to show the effects of the subprime mortgage dilemma by falling behind on payments, a report said.

Some such delinquencies, still relatively rare but part of a national foreclosure crisis, can be traced to high home prices, CNN reported Thursday.

Largely, the problem affects prime borrowers of "second-lien loans," including home equity loans and home equity lines of credit, caught up in an unstable housing market and unable to keep up with their debt, according to Countrywide Financial, the nation's largest mortgage lender.

Such loans often were "piggybacked" onto first mortgages to help finance low- or no-down home purchases but some times also taken out by overburdened prime borrowers to help pay ongoing high housing bills or finance lifestyles, the report said.

Some home buyers overpaid for houses but were able to draw on added equity to cover debts as long as prices escalated but, now with home prices falling, borrowers are facing increasing problems, CNN said.