Prime Jumbo Delinquencies Soared In January, Again

house picket happy

Here’s another datapoint suggesting that January brought no relief on the mortgage backed security/delinquencies front.

This time, Fitch looks at prime Jumbo loans (AKA: The McMansion market):


  Fitch  Ratings-NY-8  February  2010:  U.S.  prime jumbo loan performance
  continued  to  weaken  in  January as serious delinquencies rose for the
  32nd consecutive month, according to Fitch Ratings in the latest edition
  of Performance Metrics.

  ‘The   new  year  has  brought  no  relief  from  declining  jumbo  loan
  performance,’  said  Managing Director Vincent Barberio. ‘The trend line
  for  delinquencies  indicates the 10% level could be reached as early as
  next month.’

  Although  prime  jumbo  loan  delinquencies  began to rise in the second
  quarter  of  2007,  they  accelerated  in  2009 nearly tripling over the
  course  of  the  year.  Florida saw the biggest monthly jump of the five
  states with the highest volume of jumbo loans outstanding.

  Overall,  prime  jumbo  RMBS  60+  days  delinquencies  rose to 9.6% for
  January  (up  from  9.2%  for December 2009). While delinquency rates on
  earlier  vintages  (pre-2005) remain well below that of recent vintages,
  more  seasoned pools have experienced significant deterioration over the
  past  year  with  60+  days  delinquencies increasing from 1.8% to 4.3%.
  While  less  than  5% of prime jumbo senior RMBS classes issued prior to
  2005  have  been  downgraded to date, approximately 40% currently have a
  Negative  Rating  Outlook  as  a  result  of  the  weakening  collateral

  The five states with the highest volume of prime jumbo loans outstanding
  (California,  New  York,  Florida,  Virginia,  and  New Jersey) comprise
  approximately  two-thirds of the loans in question. Prime jumbo RMBS 60+
  days delinquencies for these states at January 2010 compared to December
  2009,  and  their  approximate  share of the $381 billion market, are as

  –California: 11.3%, up from 10.8% (44% share of the market);
  –New York: 6.1%, up from 5.8% (7% share);
  –Florida: 16.6%, up from 16% (6% share);
  –Virginia: 5.6%, up from 5.4% (5% share);
  –New Jersey: 7.4%, up from 7.1% (4% share).

  Prime  jumbo  borrowers that were current on their mortgage the previous
  month  but  missed  a  payment  the following month (the roll rate) fell
  slightly  to 1.2% for January from the seasonal high of 1.3% in December
  2009,  but  remained above the 1% monthly average for 2009. Of the three
  major  RMBS  sectors  (Prime, Alt-A, Subprime), Prime is the only sector
  currently experiencing roll-rates higher than one year ago.

  Fitch’s  RMBS  Performance  Metrics  combines loan level data from Fitch
  Ratings  and  LoanPerformance  to  include delinquency trends, roll rate
  movement  and  loss rates across vintage, sector, and mortgage type. The
  report  also  includes  data  on  mortgage  servicing  trends,  such  as
  modification activity and advancing percentages, as well as a summary of
  bond rating changes.

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