The credit performance of alternative-A and subprime loans has improved over the past year and concerns about an "erosion" of underwriting standards may be misplaced, according to researchers at the investment banking firm Friedman Billings Ramsey & Co.An FBR report shows that serious delinquency rates on alt-A and subprime loans declined significantly over the 12 months ending in May and in a big majority of metropolitan statistical areas (262 out of 331). Based on the performance of nonagency securitized loans, serious delinquency rates on alt-A loans declined from 1.76% in May 2004 to 0.89% as of May 31 and on subprime loans from 6.67% to 5.37%. Michael Youngblood, FBR managing director of asset-backed securities research, attributes the credit performance to improving labor markets across most of the United States. "This is direct testimony to a strong economy and indirect testimony that there is no widespread erosion in underwriting criteria," Mr. Youngblood said. The report also identifies 58 MSAs in 16 states with persistently high serious delinquency rates.
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A federal judge in Texas dismissed the Consumer Financial Protection Bureau's medical debt rule and prohibited states from passing their own laws prohibiting medical debt on credit reports.
4h ago -
Dr. Mark Calabria takes on the additional role of chief statistician of the United States; retired Ally Bank executive Diane Morais has joined First Citizens Bancshares' board of directors; MainStreet Bank has promoted Alex Vari to chief financial officer; and more in this week's banking news roundup.
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While refinances are behind the latest increases, the pace of purchase activity may be a stronger indicator of where the housing market sits.
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The share of economists expecting a September rate reduction grew in the July Wolters Kluwer survey, but the October or later percentage also increased.
9h ago -
Rising home prices and softening sales offer a mixed view of a market that some say is shifting to favor buyers.
10h ago -
The notes are backed by home improvement installment loans originated by approved dealers in Foundation Finance Company's network.
10h ago