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Alt-A Deteriorates, Jumbos Are Mixed

Analysts at Standard & Poor's say that the performance of alt-A quality mortgages originated in 2006 continues to deteriorate.

At the same time, they said that the performance of jumbo loans has been mixed, with delinquencies for the 2006 vintage rising but losses remaining negligible at the moment.

S&P said that 2.5 times more alt-A loans from the 2006 vintage are at least 90 days past than was the case for the 2005 vintage at the same point of seasoning.

Moreover, the serious delinquency rate for the 2006 vintage is four times as high as the 2004 vintage was at the same point in time, the rating agency said.

After 14 months of seasoning, 4.21% of alt-A loans originated last year were at least 90 days past due, excluding pay-option ARM loans.

Moreover, S&P said the most disturbing trend in the 2006 vintage is the rate at which 60-day overdue loans roll into the 90-day overdue bucket, suggesting that homeowners "are finding it increasingly difficult to refinance or work out problems."

S&P also issued a recent report on jumbo mortgage performance, saying that while the delinquency rate for the 2006 vintage is higher than it has been since 2000, cumulative losses on securitized jumbo loans from that vintage remain relatively low.

S&P said it remains to be seen whether or not this trend will continue.

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