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.
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.
- July 2008 Industry Extrapolations, Hope Now
- Prime Foreclosure Starts Surge Past Subprime in July, Housing Wire
Disclosure: I have no equity, debt or derivative positions in JPM.