Jan 08 2008
Subprime Mortgage Defaults Still Rising
Subprime Mortgage Defaults Still Rising
The default rate within the subprime mortgage market has jumped 170 basis points to nearly 19.5% in October, according to Friedman Billings Ramsey Investment Management. A weaker job market and declining house prices are the primary causes of rapid credit deterioration in credit performance – not resets.
The default rate on nonagency securitized subprime mortgages jumped from 17.7% in September to 19.4% in October.
The default rate on Alt A Mortgage Market jumped 75 bps to 5.4% in October. “These substantial changes in a single month suggest that labor market conditions are worsening broadly across the United States,” FBRIM managing director Michael Youngblood says in the report.
“Indeed, we continue to believe that these conditions are characteristic of a recession in economic activity.” The managing director of fixed income research noted that subprime mortgage resets of adjustable rate mortgage were not responsible for the [...]
Original post by Admin