Seriously Delinquent Prime RMBS Rise for 37th Straight Month: Fitch Ratings
The 60-plus-day delinquency rate for US prime residential mortgage-backed securities (RMBS) rose in the 37th consecutive month in June, according to Fitch Ratings. The credit-rating agency noted the "seriously" delinquent rate -- of 60 days or more -- within prime jumbo RMBS rose to 10.4% in June, up from 10.3% in May and 6.4% at the same time last year. The five states with the highest volume of prime RMBS loans outstanding -- California, New York, Florida, Virginia and New Jersey -- represent a combined two-thirds of the estimated $354bn market, Fitch said. Prime jumbo RMBS delinquencies of 60 days or more rose in all but one of these top volume states: The rate of loans rolling into later stages of delinquency within prime RMBS remained above 1% in June after a dip months earlier, but is still below the record high 1.4% recorded in March. "The persistently high roll rates indicate that the delinquency declines are more a reflection of increased property liquidation and ongoing loan modification activity than of widespread improvement in mortgage payment performance," said Fitch managing director Vincent Barberio, in a statement, adding that "Prime RMBS has yet to show any signs of a favorable turnaround." Despite improvements in subprime and Alt-A RMBS delinquencies, roll rates remain elevated in those loan types, too. Subprime RMBS delinquencies fell again in June to 43.7% from 44.8% in the previous month. The subprime RMBS roll rate fell slightly to 4.2% from 4.3% a month earlier. Alt-A RMBS delinquencies slipped to 3.7% in June from 33.9% in May, marking the third monthly decline since April 2006. Roll rates rose to 3.4% in June from 3.1% in May. Write to Diana Golobay.