From this week’s Standard & Poor’s Structured Finance Intelligence update – “U.S. Residential Mortgage Default Index: Defaults Are Waning But Cumulative Default Rates Remain Extremely High For Recent Vintages” -
- U.S. Residential Mortgage Default Index slowed in the first quarter of 2010 (OK, good…)
- Additionally, the rate of increase, measured as a percent of the unpaid principal balance, is slowing (OK, good…)
- Even though this slowdown may indicate signs of improvement, cumulative default rates have increased at an alarming pace for loans from all three credit grades (i.e., prime, subprime, and Alt-A) issued from 2005 to 2007 when loan seasoning is considered. (Gulp, uh-oh…)
What does the active market tell us? We saw fewer price reductions in 2009 and more so at lower price points (read: loan levels)… but reductions started moving higher at all price points in March 2010:
Altos 20-City Composite: Percentage of Active Sellers taking Price Reductions by Quartile
Year-over-year prices rebounded in 2009, and especially at lower price points (see: “The sub-prime pig is through the python“), but the rate of change has leveled off this Spring and is moving lower in the upper quartile prime mortgage space:
Altos 20-City Composite: Year-over-year price changes by quartile
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Could be a bigger pig than you think… http://bit.ly/bOezau | ^^
This comment was originally posted on Twitter
Could be a bigger pig than you think…:
From this week’s Standard & Poor’s Structured Finance Intelligence update … http://bit.ly/9FRfIk
This comment was originally posted on Twitter
Could be a bigger pig than you think…:
From this week’s Standard & Poor’s Structured Finance Intelligence update … http://bit.ly/a5HINc
This comment was originally posted on Twitter
Good information, Loved the post
Fact that RMD Index slowed means nothing for real mortgage oppurtunities. We know that at the same time, commercial real estate (CRE) values have dropped more than 40 percent in some markets, pushing a growing number of property owners severely underwater.
While reverse mortgage origination volume has slowed down over the last few months, changing population trends and increased borrower awareness of the product suggest origination levels are likely to increase sharply over the coming years
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