Moody’s: Prime Jumbo Delinquencies Flat During June, But Home Equity Shows Increased Stress

Moody’s reported today on both the prime jumbo markets and on home equity mortgage performance, saying that while prime jumbos seemed to stabilize in June, home equity delinquencies continued to shoot upward. The percentage of prime jumbo mortgage borrowers two or more payments late remained flat during June 2007, Moody’s said. The 60+ day delinquency rate index tracked by the agency was 0.417%, relatively unchanged from the previous month’s level of 0.421%. Meanwhile, home equity delinquencies continued to climb. Delinquency rates tracked by Moody’s own index representing all outstanding home equity pools rose to 13.20% in June from 12.35% in May, while the foreclosure and REO rate indexes reached 5.25% and 2.56%, respectively. Moody’s also said the charge-off rate index rose to 2.65% from its value of 2.50% one month prior. Countrywide was the first lending institution to point to problems in the home equity sector, saying in late July that it was facing increased pressure from delinquencies in prime seconds. Both reports on prime jumbo mortgage performance and the state of home equity loans are available to Moody’s subscribers.