Per The HousingWire:
Monday, February 8th, 2010, 9:50 amMeanwhile, per CalculatedRisk:
The performance of US prime jumbo loan performance within residential mortgage-backed securities (RMBS) slipped again in January as serious delinquencies (60+ days past due) rose for the 32nd consecutive month and edged closer to 10%, according to the latest market commentary from Fitch Ratings.
Prime jumbo loan delinquencies began to rise in Q207 but accelerated since then. In 2009, the rate of delinquency nearly tripled during the year. The serious delinquencies rose to 9.6% in January from 9.2% in December.
“The new year has brought no relief from declining jumbo loan performance,” said Fitch managing director Vincent Barberio. “The trend line for delinquencies indicates the 10% level could be reached as early as next month.”
A jumbo mortgage has an initial principal amount above the $417,000 conventional loan limit set by Fannie Mae (FNM: 0.9847 +1.52%) and Freddie Mac (FRE: 1.16 0.00%). In higher-priced markets the limit is $729,750, and, in October, appropriations committees in both the House and Senate proposed an extension of the limit through 2010.
Fitch indicated delinquency rates on pre-2005 prime jumbo RMBS vintages are still lower than recent vintages. But seasoned RMBS pools have deteriorated over the last year, rising to 4.3% in serious delinquency from 1.8%. Of all prime jumbo senior RMBS classes issued before 2005, about 40% are under a negative rating outlook due to weak collateral performance, despite only 5% having experienced downgrades so far.
According to the BLS, there are a record 6.31 million workers who have been unemployed for more than 26 weeks (and still want a job). This is a record 4.1% of the civilian workforce. (note: records started in 1948)People who lose jobs during this recession have less than a 50-50 chance of regaining their former financial position in 25 years.
The number of long term unemployed is one of the key stories of this recession. Last year, David Leonhardt at the NY Times wrote an excellent piece about this: Wages Grow for Those With Jobs, New Figures ShowIn the job market, at least, the recession’s pain has been unusually concentrated..
People who have lost their jobs are struggling terribly to find new ones. Since the downturn began in 2007, companies have been extremely reluctant to hire new workers, and few new companies have started. The economy and the job market are churning very slowly.
Try thinking of it this way: All of the unemployed people in the country are gathered in a huge gymnasium that’s been turned into a job search center. The fact that this recession is the worst in a generation means that there are many, many people in the gym. The fact that the economy is churning so slowly means that there is not much traffic into and out of the gym.
If you’re inside, you will have a hard time getting out. Yet if you’re lucky enough to be outside the gym, you will probably be able to stay there. The consequences of a job loss are terribly high, but — given that the unemployment rate is almost 10 percent — the odds of job loss are surprisingly low