Fed's Kroszner: More subprime woes likely ahead

WASHINGTON (Reuters) - More trouble lies ahead for U.S. borrowers who have subprime mortgages, as housing woes continue and loans reset at higher interest rates, Federal Reserve Governor Randall Kroszner said on Monday.

"Conditions for subprime borrowers have the potential to get worse before they get better," he said in remarks prepared for delivery to the Consumer Bankers Association.

Mortgages made to borrowers with blemished credit are referred to as subprime loans.

All indications are that housing activity will continue to weaken, Kroszner said in remarks prepared for delivery.

"House prices are likely to remain sluggish for some time," he said.

As monthly mortgage payments rise along with borrowing costs for many holders of subprime mortgages, loan delinquencies and home foreclosures are also likely to rise "for a number of quarters," he said.

(Reporting by Patrick Rucker, writing by Mark Felsenthal)