Fitch: New Year, No Improvement as U.S. Prime Jumbo RMBS Delinquencies Approach 10%

[FarCenter]

NEW YORK--(BUSINESS WIRE)--U.S. prime jumbo loan performance continued to weaken in January as serious delinquencies rose for the 32nd consecutive month, according to Fitch Ratings in the latest edition of Performance Metrics.

"The new year has brought no relief from declining jumbo loan performance," said Managing Director Vincent Barberio. "The trend line for delinquencies indicates the 10% level could be reached as early as next month."

Although prime jumbo loan delinquencies began to rise in the second quarter of 2007, they accelerated in 2009 nearly tripling over the course of the year. Florida saw the biggest monthly jump of the five states with the highest volume of jumbo loans outstanding.

Overall, prime jumbo RMBS 60+ days delinquencies rose to 9.6% for January (up from 9.2% for December 2009). While delinquency rates on earlier vintages (pre-2005) remain well below that of recent vintages, more seasoned pools have experienced significant deterioration over the past year with 60+ days delinquencies increasing from 1.8% to 4.3%. While less than 5% of prime jumbo senior RMBS classes issued prior to 2005 have been downgraded to date, approximately 40% currently have a Negative Rating Outlook as a result of the weakening collateral performance.

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