While the number of risky borrowers who missed payments climbed to a four-year high, the number of foreclosures on all homes jumped to its highest level in nearly four decades, according to the survey by the Mortgage Bankers Association. Home buyers who relied on loans insured by the Federal Housing Administration also had record default rates.

Several lawmakers, including House Financial Services Committee Chairman Barney Frank (D-Mass.), said they would offer legislation to rein in risky mortgages. Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) told reporters that Congress will have to consider providing several billion dollars of aid to at-risk homeowners.

The survey was released as the market for high-risk mortgages is collapsing. Over the past few years, highflying lenders of these loans helped millions of Americans buy homes they otherwise could not afford. The firms have seen their businesses unravel as these homeowners could not make their monthly payments. Some companies have been delisted from stock exchanges in recent weeks, while more than two dozen have shut their doors.

The consequences of the subprime mortgage meltdown now are extending beyond those lenders. Washington Mutual, the nation's largest savings and loan, told analysts that its loans to risky home buyers were performing "exceedingly poorly" and would be a drag on its earnings. H&R Block said it will delay reporting its third-quarter results because woes in the mortgage market forced the firm to recalculate its earnings, resulting in a $29 million loss that wasn't included in its previous filings.

Shares of Washington Mutual fell 5 percent, to $39.79, its lowest in 16 months. H&R Block fell 4 percent during the day and another 5 percent to $19.05 after its announcement.

"It's pretty clear that the fear is the increase in delinquencies in the subprime market will work its way through the entire financial systems," said Alan Kral, managing director of Trevor Stewart Burton & Jacobsen.

Traders said the impact of the delinquency survey was immediate. After the numbers were released, the Dow shed 70 points in half an hour. The survey measured the last three months of 2006, and some on Wall Street are worried the beginning of this year will be worse.

"People are concerned that the subprime problems are going to infect all of housing and the rest of the economy," said Donald H. Straszheim, an economist at Roth Capital Partners.

Federal and state investigators are looking at what has been going on in the mortgage industry. New Century, one of the largest subprime mortgage lenders, said yesterday it had received a federal grand jury subpoena for its trading and accounting practices. New Century, which stopped making loans last week, was delisted by the New York Stock Exchange yesterday.

Massachusetts' top securities regulator, Secretary of State William Galvin, said yesterday that he issued subpoenas to two Wall Street investment banks, UBS Securities and Bear Stearns, as part of a probe into whether the firms' researchers ignored the mounting problems among subprime lenders.

On top of these investigations, other prominent subprime lenders shed more light on their financial woes yesterday. Shares of Accredited Home Lenders Holding, another large subprime lender, lost 65 percent of their value after the San Diego firm said that it had not met the financial terms of its creditors, which are now demanding money that Accredited does not have. This is the same situation that New Century is facing.

Locally, Friedman, Billings, Ramsey Group is considering selling its First NLC subprime mortgage loan business after cutting costs and tightening loan policies. The Arlington company said in a statement that it "will explore strategic alternatives to maximize the value" of the division.

Selling loans to people with questionable credit was a popular trend over the past few years. Lenders could repackage these mortgages as bonds and sell them on the market for high returns. These lenders believed homeowners simply could sell or refinance their homes if they had trouble making payments.

But when the market cooled, and home prices leveled off, millions of those borrowers could not afford to refinance or sell their homes, wreaking havoc on the once-thriving subprime market.

Especially onerous were the adjustable-rate mortgages, which offered low teaser rates that spiked in later years.

Those types of mortgages grew in popularity in spring 2004, when interest rates hit a low, said Barry Glassman, senior vice president of financial planning firm Cassaday & Co. But now that these mortgages are starting to adjust, some borrowers face interest payments that are at more than double the original rate.

Yesterday's Mortgage Bankers Association report, which surveyed 43.5 million loans, shows how this phenomenon played out in the last three months of 2006.

According to the report, 4.95 percent of all home mortgages were delinquent, meaning they were at least 30 days late. The most dramatic rise was among subprime borrowers. The survey also showed that lenders initiated foreclosures against 0.54 percent of borrowers -- or about one in every 200 -- the highest in the 37-year history of the survey.

While most of the turmoil has been driven by the subprime market, even credit-worthy borrowers appear to be facing some of the same issues. Their delinquency and foreclosure rates also inched upwards. The rate of foreclosures that started during the fourth quarter more than doubled since the start of 2006 for credit-worthy borrowers.

"There's some indication here, and it's not apocalyptic by any means, that the problems might not be contained in the subprime market," said Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University.

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