14 Jul 10 Prime-Rated Mortgage Loan Security Delinquencies Increase
Home loan delinquencies have shown signs of plateau in recent months, with a number of measures showing their first declines since 2007, when the housing bubble began to lose air. Delinquencies of 60 days or more on prime-rated jumbo mortgages, or those of at least $417,000, rose to 10.4% in June from 6.4% a year earlier and 10.3% in May. Such loans saw the biggest increase in delinquencies last year among home borrowings, though the overall rate remains far below those of other mortgage types. Roll rates remained above 1% after dipping below that level in April, but were lower than their 1.4% peak in March.
The prime-rated jumbo loans make up the vast majority of the prime-rated mortgage loans in Fitch’s readings. Serious delinquencies for Alt-A loans–typically given to prime-rated borrowers who did not document assets and/or income, declined to 33.7% in June from 33.9% in May, but were up from 29.1% a year earlier. Roll rates rose on month to 3.4% from 3.1%. Prior to a sharp April drop, roll rates haven’t fallen below 3% since June 2008. Subprime delinquencies dropped to 43.7% from 44.8% in May but were above the prior year’s 41.2% The June roll rate fell to 4.2% from 4.3% sequentially but was well below the 12-month average of 5.3%. Article was written by Tess Stynes, Dow Jones Newswires
Tags: Fitch Ratings, subprime mortgages
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