Moody's: Jumbo and Home-Equity Performance Weakens

While everyone keeps wondering how bad the situation in the subprime market really is, data indicate other sectors, namely jumbo and home-equity securities, also showed signs of weakness in May, albeit slightly.

According to Moody's U.S. Jumbo Mortgage Credit Indexes for the June reporting period shows the May 60-plus-day delinquency rate was 0.422%, compared to 0.397% in April and 0.268% in May 2006.

However, Moody's notes the performance of securitized prime jumbo mortgage loans was "slightly" weaker since the percentage of borrowers 30-59 days delinquent "has remained relatively low" at 0.550% in May. Also prepayments remain low with a one-month CPR ranging between 14%-18% over the last 12 months.

Similarly, the home-equity sector performance as tracked by Moody's U.S. Home Equity Index Composite for the June reporting period deteriorated. In May, the 60-plus-day delinquency rate based on current balance rose to 12.35% from 11.63% in April, while the foreclosure and REO rate indexes reached 4.89% and 2.38%, respectively. Meanwhile, the charge-off rate index rose to 2.5% from its value of 2.26% in April.

(The reports track the aggregate performance of prime-quality nonconforming jumbo loans and home-equity loans backing securities rated by Moody's.) (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.bondbuyer.com/ http://www.sourcemedia.com/