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Delinquency Rates for Various Mortgage Types

Date:July 21, 2008 | Author:Spencer Rascoff | Category:Home Mortgage

There’s a whole lot of fascinating mortgage data from Deutsche Bank in this 56 page report.

A few selected graphs:

Delinquencies on Prime Fixed-Rate Mortgages, by FICO Score

As you might expect, prime fixed rate mortgages don’t frequently default. Also, notice the high correlation between FICO score and default rate.

Delinquencies on Alt-A Fixed-Rate Mortgages, by FICO Score

Look at how much higher the default rates are for Alt-A.

Delinquencies on Prime Adjustable Rate Mortgages, by FICO Score

Adjustable rate mortgages, when Prime (not Alt-A), have delinquency rates similar to Prime mortgages.

Delinquencies on Option ARMs with No Prepayment Penalty

Yikes, look at the default rates for Option ARMs

Reminder: You can find current mortgage rates and charts, and get custom loan quotes — anonymously– in Zillow Mortgage Marketplace.

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Responses (12)

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yanni raz 10:49 PM - Jul 21,2008

what’s happening with the real estate prices?
They will come back up soon?
It’s really hard to get a mortgage today, try hard money loans if you need a loan.
Real estate is not going anywhere I think, anyone have a comment for me?
Azran 10:51 PM - Jul 21,2008

Foreclosures are there with great prices and mortgage you can get but you have to put a lot of money as a down payment.
Steve Simon 6:48 AM - Jul 22,2008

The graphs show what the “Old Men Know!”
If the mortgage industry low ethic shops didn’t give loans to those who never should have gotten them we would not be in the real estate mess we are in. To be sure there were other factors contributing to our current state, energy price inflation being a significant one; but were it not for the greedy ethically challanged lending practices used by many in the loan industry the trouble would not be as bad as it is.
The mess they have created will take years to work itself out…
Steve Simon is the lead instructor of the Steve Simon School of real estate, a Florida real estate school that offers the State of Florida real estate license courses online
marc 3:35 AM - Jul 24,2008

well the land price, i mean agricultural land and especially green fields with clean past (no pesticides) should be in hot pursuit because as an old saying “they don’t produce it anymore!…”
another must have should be Wind Fields for wind parks
i think with actual fuel prices this is another hot pursuit…
also lands with stone quarries you can build your dream home down there, there’s no need for air conditioning in summer time, you can excavate when you have some spare time, one room at a time only…:)
Shell Smith 1:38 PM - Jul 30,2008

Thanks for taking the time to post those graphs – I am a visual person, so those are great for me. I agree with a comment above that foreclosures are a good way to go right now. I think it is important to understand that they could need a lot of work though. I have found a great site called PropertyMaps where you can search for foreclosures in specific areas, then of course there is zillow. Lets all just hope the market bounces back soon – so we don’t have to build in wind parks.
none 12:40 PM - Aug 17,2008

Look at graph 1, Prime FRM and graph 3, Prime ARM. Look at 650-700 in months 32-33 in each. In graph 1, there’s a sharp drop and then a declining tail. In graph 3, no drop and no declining tail. All the other lines appear very similar between the charts.

When a 650-700 FICO prime fixed mortgage reaches month 32, its likelihood of becoming 60+ past due drops noticably. Any guess why?
Paul Dunn 9:20 PM - Aug 18,2008

What would be interesting to see would be the ALT-A graph by date the loan was originated.
Justin Bartlett 12:37 PM - May 3,2009

Out curiosity, what is the source for this info? It completely makes sense. Those option arms are scary stuff!
Cyprus 8:51 AM - Aug 14,2009

“well, we all know theirs huge benefits to register a company in Cyprus, lol. My account pointed me to a few blogs on the net which i’m rather reluctant to check out as i’ve been so busy lately”
Mike Seeliger 8:26 AM - Jun 15,2011

As one of the old men; the problems are loan structure, originator/underwriter communication, call it what you will nothing will replace custom loan origination. Anyway, expect 3% on FHA/VA and fixed subprime, 1% to 2% insured fixed 80,90,95′s prime. Option Arms should only be use with prime borrowers/subprime properties. Keep it simple.