Trouble in the Mortgage Market for 2008?

Bloomberg is reporting that a leading real estate investment trust is forecasting higher default rates for subprime mortgages during 2008.
"Late payments of at least 90 days, foreclosures and holdings of seized property among so-called Alt-A mortgages in bonds will probably rise to 3.92 percent in May 2008, from 2.69 percent in May 2007 and 0.89 percent a year earlier, Michael Youngblood, the top mortgage-bond analyst at Arlington, Virginia-based Friedman Billings wrote in an Aug. 3 report. "
Late payments and foreclosures will rise to 0.53% of prime mortgages (from 0.22% two years ago) and a record 14.6% of sub-prime mortgages (from 6.72% two years ago).
In other mortgage-related news, Bear Stearns jettisoned its co-president Warren Spector after two of its mortgage investment hedge funds collapsed. Last week, Bank of America characterized the collapse as "isolated incidents."