home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News

 

Mortgage News

HOT Topics

production

servicing

compliance

legal

fraud

secondary

jobs

appraisal

site map

www.loan-academy.com/
twitter linkedin
facebook google+
Search:

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

Mortgage Backed Securities | MBS News | MBS Statistics
News about commercial and residential mortgage-backed securities. Stories about ratings actions and changes to servicer ratings. Studies and reports about the performance of securitizations and problem vintages and classes. Subprime, Alt-A, home equity and j u m b o analysis.


Rapid Alt-A Deterioration

Fitch reviewing ratings on 2005-2007 Alt-A transactions

March 7, 2008

By MortgageDaily.com staff


Alternative-A loans behind residential mortgage-backed securities have seen a sharp increase in defaults as home prices continue falling, available loan programs contract and delinquent borrowers become more willing to walk away.

The rapid deterioration in Alt-A performance has prompted Fitch Ratings to take a closer look at the 417 Alt-A transactions it rates, including 138 adjustable-rate mortgage deals and 279 fixed-rate deals. The review involves $160 billion in RMBS, which have already been placed on Rating Watch Negative.

The ratings agency expects to complete it review of the deals by next month.

Fitch said there are $10 billion of subordinate Alt-A RMBS that face the most pressure from rising defaults. Subordinate classes from 2005 to 2007 transactions that Fitch has taken ratings actions on number 199.

"Accelerating home price declines partly due to the recent dramatic contraction in the non-agency mortgage origination and securitization markets has been the primary catalyst of the Alt-A performance downturn," Fitch Managing Director Glenn Costello said in the statement. "This development has effectively eliminated the option to sell or refinance a home for many borrowers."

Delinquency of at least 60 days has reached 8.6 percent on fixed-rate transactions from 2006 and 13.6 percent on ARM transactions, according to the announcement. Historically, Alt-A delinquency had been between 1 percent and 2 percent.

Lifetime loss rates estimates on the 2006 vintage 'B' tranches have risen to 2.9 percent on fixed-rate loans and 3.1 percent for hybrid ARMs. On 2007 vintage 'B' tranches, loss rates on fixed-rate deals have jumped to 3.4 percent while they have risen to 4.1 percent for 'B' ARM classes.

The New York-based agency noted its analysis is based on a 25 percent home price decline from the peak in 2006. Another factor is the willingness of Alt-A borrowers with high loan-to-values to walk away from properties.

"This behavior appears to be largely attributable to the use of high risk mortgage products such as 'piggy-back' second liens and stated-income documentation programs, which in many instances were poorly underwritten and susceptible to borrower/broker fraud," the statement said. "While Alt-A mortgage pools represent a broad range of borrower and loan characteristics, these risk factors are present in many Alt-A transactions."

Fitch explained that falling mortgage rates and the recently enacted economic stimulus package could positively influence Alt-A default and loss rates.

Servicing News | Servicer Ranking | Delinquency Statistics
Stories about mortgage servicers, delinquency and f o r e c l o s u r e s. Coverage of servicing lawsuits and loan servicing technology.


Nonprime and Subprime News | Subprime Statistics
Stories about non-QM products. Coverage of subprime, Alt-A and
hard money lending. Home-equity loans and home-equity lines of credit.



SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter

MBS

mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders