Prime Foreclosures Now Greater Than Subprime

| About: JPMorgan Chase (JPM)

"Prime looks terrible." Those were the words of Jamie Dimon, CEO of JPMorgan Chase (NYSE:JPM) when he had his earnings call for Q2. And, indeed, prime is terrible.

New data out from Hope Now shows that there are now more prime mortgage delinquencies in the United States than there are subprime delinquencies. This is almost certain to mean some major losses on mortgage-related securities like CDOs and RMBSs.

If you enlarge the image above, you will clearly see that prime mortgage delinquencies of 60 days or more have been trending up so quickly that they now represent more than subprime with 1,009,000 prime delinquencies versus 901,000 subprime delinquencies.

Housing Wire also uses the Hope Now data to show that there are now more prime foreclosures than subprime foreclosures as well.

HOPE NOW’s monthly data shows that during July, foreclosures were initiated on 105,000 prime borrowers and 92,000 subprime borrowers. Prime foreclosure starts in July were well more than double the 51,000 recorded one year earlier, and up almost 10 percent from June; in comparison, subprime foreclosure starts in July were up 22 percent from one ago, and up 10 percent month-over-month as well.

This is yet more evidence that we are far from done with banking industry losses and writedowns in the United States. Get ready for Q3.


Disclosure: I have no equity, debt or derivative positions in JPM.