Concerns over risky US mortgage lending mounted yesterday as a key indicator of credit problems hovered at record levels, another small mortgage lender failed and a big homebuilder admitted borrowers' difficulties could damage its business.

Investor worries over loans made to US borrowers with weak credit histories have grown since housing market activity slumped last year. They were throwninto sharper relief last week when HSBC and New Century warned they had underestimated the spike in defaults on so-called sub-prime mortgages.