Alt-A and Subprime Delinquencies Reduced

Fitch Ratings have noted a decline in Alt-A and Residential Subprime Mortgage-Backed Security delinquencies in May. Prime Mortgage-Backed Security delinquencies continued to increase.

The Alt-A security delinquencies fell to 33.9% from 34.1% in April while the Subprime RMBS category declined from 45.2% to 44.8%. About 9% of performing sub-prime loans represents loan modifications, and these are still considered in high risk of default.

Fitch speculated that the decline in delinquencies may be related to some catch-up on the part of Homeowners following receipt of tax refunds.

Increases among prime loan delinquencies have been small since the beginning of the year, a 1.1% increase. Jumbo prime loan delinquencies are way up since 2009. They rose to 10.3% in May, up from 10.2% in April and up from 5.9% in May 2009.