-- Olivia Thetgyi
The national average for delinquencies 60 days and more in prime jumbo residential mortgage-backed securities is approaching 10% as the sector’s performance continues to deteriorate. “The fact that one out of 10 jumbo prime borrowers are delinquent psychologically has an impact,” said Vincent Barberio, managing director in RMBS surveillance at Fitch Ratings. The worsening performance is being driven primarily by rising unemployment over 2008 and 2009 and the fact about one-third of prime borrowers owe more on their homes than the properties are worth, he said.
Prime jumbo RMBS have emerged as the next area of concern as subprime and Alt-A residential securitizations have started to improve (TSCI, 1/29/10). Across the nation, prime jumbo RMBS 60 days or more delinquent rose to 9.6% in January from 9.2% in December. Delinquencies in previous years had been in the low single-digits, Barberio said. Delinquencies in certain states have already exceeded the 10% mark, with 16.6% of Florida prime jumbos delinquent and 11.3% of California prime jumbos behind in payments.
Roll rates, a measure of the number of borrowers current on their mortgages one month but delinquent the next, are also worsening in prime jumbo RMBS. The roll rate in that sector dipped just slightly to 1.2% in January from a high of 1.3% in December, still higher than the 2009 average of 1%. Meanwhile, subprime and Alt-A deals have seen some improvement here. Subprime roll rates fall to 6% over 2009 from a high of 7.5%. Roll rates in Alt-A have also fallen, to 4% over 2009 from a high of 5.2%.