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Recent Mortgage Loss and Credit Performance Commentary Review and Commentary
This is the public version of our quarterly
review of Alt-A and subprime mortgage performance sourced from the NY
Fed and FDIC data. All paying subscribers can access the entire document
here: 4Q09
Alt-A and Subprime commentary (452.33 kB 2010-05-21 05:49:09).
Foreclosures on First Lien Mortgages increased from 11.5% as on 31st
October 2009 to 11.74% as on 31st January, 2010. Mortgage rates on Prime
loans and Alt-A loans increased by 25bps and 21bps to 7.66% and 12.23%
respectively over the same period. Delinquency rates for first lien
mortgages on the other hand decreased by 7bps to 5.6%, for the quarter
ended December 31, 2009.. While Net Charge-off rates for Alt-A loans
increased by 2.12% points q-o-q to 30.49% as on 31st Dec 2009,
delinquency rates dropped by 27bps over the same period to 12.1%
In case of Subprime loans, Net Charge off rates and Foreclosure
rates, both rose to 44.6% and 15.6% respectively during 4Q09, compared
to 42.9% and 15.4% during 3Q09. Delinquency rates declined from 26.4% in
3Q09 to 25.3% in 4Q09. Net charge of rates for HELOCs rose 13bps to
3.34% during 4Q09 while delinquency rates had a negligible decline.
Net charge-off rates and delinquency rates for Business Loans
(C&I loans) marginally declined during 4Q09 remaining more or less
constant at 2.5% and 4.5% respectively.
Delinquency rates under CRE loans remained steady during 4Q09 at 8.8%
when compared with 3Q09. While delinquency rates for multifamily loans
did not show any drastic changes in 4Q09, net charge-off rates under
construction loans increased considerably from 6.3% in 3Q09 to 8.4% in
4Q09
Credit cards had a better quarter with net charge off rates and
delinquency rates showing marginal improvements in 4Q09. Net charge off
rates declined from 10.2% in 3Q09 to 9.5% in 4Q09, while delinquency
rates declined from 6.6% to 6.4% over the same period.
Other consumer loans showed a healthier 2.7% net charge off rate in
4Q09 as against 3.2% in the previous quarter. Delinquency rate in this
segment also improved marginally, declining by 19 bps to 3.5% in 4Q09.
Net charge-off rates and delinquency rates for Other loans marginally
increased. While net charge off rates increased from 1.7% in 3Q09 to
1.8% in 4Q09, Delinquency rates remained constant at 1.1% over 4Q09.
Readers may also be interested in these related posts:
Commercial Delinquencies Rise Again, Data Goes
Ignored
Is the Threat to the Banks Over?
Implied Volatility Says So
BoomBustBlog Demonstrated Today’s News Last Month by Using Facts:
the Housing Market is Headed Down
Reality Check for Bank
Investors, Mortgage Investors and Home Buyers
It’s Official: The US Housing Downturn
Has Resumed in Earnest
It’s HELOC Deja Vu,All Over Again
A Fundamantal Investor’s Peek into the Alt-A
Market
Deflation, Inflation or Stagflation –
You Be the Judge!
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The bust-in-places-that-never-went-boom is an important note...
I keep thinking about that, you know how they talked about the roaring '20s and then the bust. Did 90's and the 00's feel roaring? Sure we had the tech bubble and ficitional housing wealth and the banking guys made fortunes...but as an average engineer working away, I never felt things were amazingly booming, like I was a hot commodity..and I wonder how decent hard working people with high school education and jobs in manufacturing felt...even in 95 and 05, I remember talking to people about how much harder it was to maintiain a middle class lifestyle compared to say the 50s and 60s...this "great recession" or whatever you call it just seems par for our declining course...not just desserts after we all had so much..
Previous comments muzzled down this guy. His brash style was entertaining and alive.
Now reports on a neutral tune.
Nobody muzzled me, I've just been very busy in this very volatile market. When time permits, I'll get back to throwing some spice in the dinner :-)
Reggie, you're our version of showing the Greek riots on TV. Some people want the Greek riots turned off but I'm doing a study of the effects of tear gas on the Acropolis so I keep watching. :>)
Keep up the good work.