NEW YORK, April 7 Late payments on U.S.
subprime mortgages fell in March for the first time in four
years while defaults on prime home loans kept escalating to top
10 percent for jumbo loans, Fitch Ratings said on Wednesday.
Seriously delinquent loans remained elevated across loan
types, however, with the U.S. unemployment rate hovering just
below 10 percent and government efforts to stem foreclosures
keeping more struggling borrowers late paying rather than
failing on their loans.
Major U.S. mortgage finance sources Fannie Mae FNM.N and
Freddie Mac FRE.N have targeted up to $200 billion of loans
that are at least 120 days delinquent and have been
repurchasing them out of securities pools to preserve capital.
Starting their rise in the second quarter of 2007, overall
delinquencies on prime residential mortgage-backed securities
(RMBS) nearly tripled in 2009 and are already up 90 basis
points this year, Fitch said in a statement.
Prime jumbo RMBS 60-plus days delinquencies rose to 10.1
percent in March from 9.9 percent in February and 4.8 percent a
Mortgage defaults first spiraled up on subprime loans,
based on lax lending to many high-risk borrowers. As
unemployment marched up to double digits, borrowers with better
credit started to default in mounting numbers and home-loan
foreclosures spiked to record highs last year.
Subprime RMBS delinquencies fell to 46.3 percent in March
from 46.9 percent in February, but stayed well above 39.8
percent from a year ago, Fitch said. These delinquencies rose
dramatically for 44 months from a low point of 6.2 percent in
"The improvement in subprime delinquencies may be nothing
more than a seasonal anomaly of tax refunds being utilized to
help borrowers catch up on late mortgage payments," Fitch
Managing Director Vincent Barberio said in the statement.
However, the roll rate -- or the pace of performing loans
turning delinquent -- fell significantly to the lowest in over
two years, he noted, adding: "An increase in loan modification
activity also contributed favorably."
The five states with the highest volume of prime jumbo
loans outstanding -- California, New York, Florida, Virginia,
and New Jersey -- represented about two-thirds of the total
Prime jumbo RMBS 60-plus days delinquencies for these
states at March 2010 versus February, and their approximate
share of the estimated $371 billion market, were as follows:
--California: 11.8 percent, up from 11.6 percent (44
--New York: 6.7 percent, up from 6.3 percent (7 percent
--Florida: 17.5 percent, up from 17 percent (6 percent
--Virginia: 5.8 percent, up from 5.7 percent (5 percent
--New Jersey: 8.2 percent, up from 7.9 percent (4 percent
(Reporting by Lynn Adler; Editing by James Dalgleish)