Profits and Balance Sheet Developments at U.S. Commercial Banks in 2007
Figure 28. Rate of serious delinquency on residential mortgages, by type of mortgage and type of interest rate, 2000-08. Data plotted as curves. The rate of serious delinquency on fixed-rate subprime residential mortgages starts in October 2000 at about 6.0 percent, rises on balance to about 8.7 percent in early 2002, declines on balance to about 5.5 percent by mid-2004, and remains in that range through March 2007; it then jumps to about 8.5 percent by March 2008. The rate of serious delinquency on variable-rate subprime residential mortgages starts in October 2000 at about 8.5 percent and increases on balance to about 10.5 percent in early 2002 before declining on balance to 5.5 percent in early 2005. The rate moves up significantly over the next two years to about 12 percent in early 2007 and then surges to more than 25 percent by March 2008. The rate of serious delinquency on fixed-rate prime residential mortgages starts at about 0.9 percent in October 2000, edges up to about 1.2 percent in December 2005, slides to around 0.8 percent in April 2007, and returns to about 1.2 percent by March 2008. The rate of serious delinquency on variable-rate prime residential mortgages starts at around 1.5 percent in October 2000, rises to almost 2 percent by January 2002, falls to about 0.5 percent in March 2006, and then increases to about 3.2 percent by March 2008.
Note: The data are monthly and extend through March 2008. Seriously delinquent loans are 90 days or more past due or in foreclosure. The data are representative of all residential mortgages, not just those held by commercial banks.
Source: First American LoanPerformance.