According to a new report by Fitch Ratings, "serious delinquencies" on prime jumbo mortgages rose again last month, nearing 10%. "Serious delinquencies" are payments at least 60 days late.
"The trend line for delinquencies indicates the 10% level could be reached as early as next month," according to a Fitch statement. The rate last month reached 9.6%, nearly triple that of last year. Jumbo mortgages are loans larger than Fannie Mae or Freddie Mac will finance.
I am curious to know what percentage of these loans in arrears are strategic defaults. We have seen homeowners in many parts of the country walkaway from there home becaue they are so "upside-down". The homeowners would rather take the hit of a foreclosure rather than throw good money after bad. Are luxury homeowners choosing to stop paying their loans even though they might be able to afford them?
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