Jumbo Performance Showing Signs of Credit Improvement

In a rare bit of good news on the loan performance front, Moody's reported that the serious delinquency rate on securitized, prime credit quality jumbo mortgages improved slightly in March.

That reverses a trend of credit deterioration, the rating agency said. It was the first time in nine months that the jumbo mortgage delinquency rate improved.

Moody's said that 0.378% of prime, jumbo mortgages were 60 or more days past due in March, down from 0.383% in February. However, the March 2007 rate was up 100 basis points from the 0.278% serious delinquency rate in March 2006.

Measured on a quarterly basis, Moody's said that the serious delinquency rate for the first quarter of this year, at 0.370%, was higher than in the fourth quarter of last year, when the rate was 0.329%.

Despite the overall delinquency improvement, Moody's said that foreclosure and REO levels continued to increase in March from a year earlier as well as in the first quarter.

Moody's analysis found that the foreclosure rate in March on securitized jumbo loans was 0.124%, up 72% from the foreclosure rate a year earlier. The REO rate was 0.041%, up 93% from a year earlier.

Snapshot: Moody's Jumbo Mortgage Credit Index

Category March '07 March '06 % Change

60-89 Day 0.110% 0.73% 51%

90 Day Plus 0.103% 0.111% -8%

Foreclosure 0.124% 0.072% 72%

REO 0.041% 0.021% 91%

Total 60 Plus 0.378% 0.278% 36%

Source: Moody's

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