U.S. Alt-A RMBS delinquencies rise in June 2008

July 24, 2008 by · Leave a Comment
Filed under: Industry News 

It looks like the sub-prime show just keeps going.  Ratings Direct issued a report on July 22nd that showed alt-a residential loans made in 2005, 2006 and 2007 are all showing increased late payments, foreclosures and REO (properties that go back to the bank).

These so-called RMBS or Residential Mortgage Backed Securities were the end product of  pools or home loans that were originated during our lasting housing bubble and packaged into huge securities and sold off in Tranches to investors that would  make money off the payments the new home owners would make.

Here is the Reuters Release:

Total delinquencies have continued to increase among U.S. Alternative-A residential mortgage-backed securities (RMBS) transactions originally rated in 2005, 2006, and 2007, according to a recent report published by Standard & Poor’s Ratings Services.

As of the June 2008 distribution date, total delinquencies were 14.98%, 20.09%, and 13.34% of the aggregate pool balances for the 2005, 2006, and 2007 vintages, respectively.

These figures have increased approximately 7.66% for the 2005 vintage, 6.74% for 2006, and 10.03% for 2007 since the May 2008 distribution date. Serious delinquencies (90-plus days, foreclosures, and real estate owned {REO}) have also risen since the last distribution date.

As of the most recent reporting period, serious delinquencies for the 2005, 2006, and 2007 vintages were approximately 10.25%, 13.99%, and 8.74% of the current aggregate pool balances, respectively.

When compared with the prior distribution date, serious delinquencies were up approximately 12.01% for the 2005 vintage, 10.65% for 2006, and 16.25% for 2007.

Transactions issued in 2007 have the highest amount of cumulative losses when compared with other vintages at the same seasoning levels. After 12 months of seasoning, cumulative losses for transactions issued in 2007 represent 0.04% of the aggregate original pool balance, which is four times the amount recorded for the 2006 vintage (0.01%) at the same level of seasoning.

The full report, “U.S. Alternative-A RMBS Performance Update: June 2008 Distribution Date,” was published July 22, 2008, on RatingsDirect.

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