Default recidivism rates on jumbo and alt-A mortgage loans tracked at similar levels when comparing the first quarter of 2010 to the second quarter of 2011, according to a new report from Bank of America Merrill Lynch (BAC). According to the analysis, the highest levels of recidivism come from mortgages refinanced in 2008, especially in the second half of the year. For both the third and fourth quarter of the year, more than half of the loans redefault after a year. Merrill Lynch defines a mortgage as a redefault when payments are missed for more than 60 days. Recidivism decreased for loans originated sooner, so the redefault rates will invariably rise as time progresses, though potentially to lesser degree. JP Morgan is also the mortgage servicer with the highest level of recidivism rate among jumbos (click breakdown chart below). However, any lack of improvement on jumbo loans in terms of recidivism rates on defaulted loans may create a disincentive for the private mortgage market to jump into the segment, especially as conforming loan limits are dropping. The conforming loan limit currently allows homeowners with mortgages as high as $729,750 to obtain financing guaranteed by Fannie Mae, Freddie Mac and the Federal Housing Administration. The temporary ceiling on that limit expires Oct. 1, which will push the limit back to $625,500. Legislation is pending on Capitol Hill that could extend the limit past the expiration date to ensure the jumbo mortgage market has the ability to obtain financing for new mortgages and refinancings. On the other hand, the subprime re-default rate improved somewhat when comparing the first half of 2011 to last year. "We think this is partly due to both fewer modifications and servicers taking more care with servicing procedures following discoveries of robo-signing at the end of 2010," Merrill Lynch wrote in its report. Write to Kerri Panchuk.