Report Says July Delinquencies Up 30 Percent; Will the 2007 Mortgage Vintage Fare Any Better?

A new report issued by McDash Analytics shows that July delinquencies across all mortgage categories climbed by 30.2 percent versus year-ago levels — and with the exception of VA loans, every major loan category is now showing an increase in delinquency activity relative to year-ago levels.

Here’s the full report, which is offered for free this month (hence, something I am free to blog about).

You wouldn’t probably be surprised to see delinquencies among jumbo ARMs up 92 percent — but you might be surprised that conforming ARM delinquenices are up 105 percent. (It’s probably a good thing Fannie issued new criteria for conforming ARMs recently, although they won’t take effect until late October.)

You’ll also want to note that delinquencies on 30 year conforming fixed loans are up 16 percent versus last year, while 30 year jumbo fixed mortgages saw delinquent borrowers jump up 22.7 percent as a percentage of unpaid principal balance — evidence that even more traditional mortgage products are coming under pressure.

Some other items of note: 5.7 percent of all loans in the 2006 vintage are now delinquent, according to the report, while early returns on the 2007 vintage show total delinquences at nearly 3 percent already. While we know what’s going on with 2006 vintage loans, that 2007 number strikes me as awfully high given how early in the cycle we are.

Is it possible that while mortgage companies have been busy tightening the screws on lending since the start of this year, that the changes weren’t coming fast enough to really improve originations in the first half of this year? After all, BofA didn’t do away with stated income borrowing until today, according to this post over at Blown Mortgage.

With that sort of junk still being originated, I’m now starting to look ahead and think that there could continue to be problems beyond just the 2006 vintage.