Unemployment Spurs Rise in US Subprime Delinquencies

Rising unemployment is pushing up delinquencies in US subprime mortgages at an “alarming” rate, according to CreditSights.

“The latest numbers from our Subprime RMBS sample show a huge jump in delinquencies in the past two months, ” CreditSights says in a new report: Subprime Pool Performance Update: Delinquencies Rocket as Unemployment Rises. “All three of the vintages that we track posted their largest one month increases in October and the largest three month increases since March. As the chart shows, delinquencies as a percentage of the remaining balance in 2005 subprime RMBS had even started to fall despite the remaining balances continuing to shrink.”