Jumbo Performance Withstands Pressure

Despite concerns about weakening mortgage credit quality, jumbo mortgages continued to defy expectations through the first five months of the year.

The performance of securitized prime quality, jumbo mortgage pools remained strong in May 2006, according to Moody's Jumbo Mortgage Credit Indexes. Delinquencies of 30-59 days fell 7.2% from their May 2005 level and, on a year-over-year basis, have improved in 11 of the past 12 months.

The 60-plus-day delinquency rate index, at 0.268%, declined slightly from last month's level, but remains elevated compared to its value of 0.220% in May of last year.

Delinquencies of 60-plus days have been slowly falling from their peak in November 2005 following an isolated spike, most likely related to the effects of hurricanes in the Gulf Coast during the third quarter.

The seriously delinquent loans appear to be rolling through the stages of delinquency. Delinquencies of 60-89 days, while higher than they were at this time last year, have seen smaller year-over-year increases over the past few months while yearly increases in foreclosure and REO rates appear to have picked up speed over the same period, Moody's said.

The Moody's index reflects jumbo pools that are tracked by Moody's Investors Service. (c) 2006 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com

Next in News ►