Some 57 percent of mortgage broker customers were unable to refinance their adjustable-rate loans to avoid higher monthly payments in August, suggesting the U.S. housing slump may worsen, according to a national survey on Tuesday.

Subprime borrowers had trouble refinancing mortgages because loan programs were no longer available, according to a poll of 1,744 brokers in the last week of August by Campbell Communications, a Washington-based research firm. Prime borrowers were impeded by appraisals and high loan-to-value ratios, it said.

About 5 million adjustable-rate mortgages are slated to reset to higher rates in the next 18 months, according to Lehman Brothers. Economists warn the housing slump could deepen if those homeowners are unable to refinance loans under tighter underwriting guidelines and as home values stagnate or fall.

Lenders cut off credit to customers at an especially fast rate in August as many investors stopped buying the debt banks use to finance home loans. Commenting on business in the weeks ahead, 14 percent of brokers said they had no available lender for subprime loans at all, said Thomas Popik, the author of the survey and principal of Nashua, New Hampshire-based research firm Geosegment Systems.

"The question is not what home sales are doing now, but what will happen three to four months from now" as the lack of lender funding in August filters down, Popik said. Prime borrowers are so far less affected, he said.

ARMs resetting in the second half of 2007 top $220 billion, with $170 billion subprime, Lehman data shows.

Expectations that the resets will add to already high foreclosure rates have fueled a push by lenders to modify existing loans where possible, and President George Bush recently proposed that homeowners facing default would have easier access to Federal Housing Administration loan programs.

Broker customers with subprime, or weak, credit faced the most problems, with 64 percent unable to refinance their ARMs in August, the survey said. Half of prime borrowers were turned away from ARM refinancing, it said.

Countrywide Financial Corp. has sharply reduced its subprime lending, which may exacerbate refinancing troubles because many brokers were depending on the No. 1 U.S. mortgage lender, Popik said. Countrywide was the second most-cited lender that brokers would use in the future, behind First Franklin, which is owned by Merrill Lynch & Co., he said.

Declining home sales led the National Association of Realtors on Tuesday to slash its forecast for the seventh consecutive month. Median prices on existing homes will probably drop 1.7 percent in 2007 to $218,200, compared with the NAR's earlier forecast for a 1.2 percent drop.

The Campbell survey also found that a third of home purchase closings were canceled in August. Loan closings were canceled for 56 percent of subprime borrowers in the month amid failed approvals, while closings for 21 percent of home buyers with good credit were foiled.

Mortgage