Peter McNally

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Moody’s: Deterioration Continues for Prime-Quality Mortgage Pools

Mar 30, 2007By

Serious delinquencies — borrowers more than 60 days in arrears — for U.S. jumbo mortgages increased 16 percent during the fourth quarter of 2006 compared to year-ago levels, according to a report issued recently by Moody’s Investors Service. The report also found deterioration in early-stage (30-59 days) delinquencies among jumbo borrowers, with early-stage delinquencies rising on a year-over-year basis for the first time in the last two years. The uptick in jumbo delinquencies could indicate that the recent troubles in the subprime market may be spilling into certain prime markets, although numerous sources have told HW it is too early to tell for certain. Jumbo borrowers typically have very good credit, but have large mortgage balances that exceed the conforming loan limits set by Fannie Mae and Freddie Mac.