Page 247 - untitled

 FINANCIAL CRISIS INQUIRY COMMISSION REPORT

Loan Performance in Various Mortgage-Market Segments
Bars shows distribution of average rate of serious delinquency.
IN PERCENT MIDDLE 50%

2008 MIDDLE 90% 2009

GSE GSE
SUB SUB

ALT ALT

FHA FHA

0 10 20 30 40% 0 10 20 30 40%

NOTE: Serious delinq uencies include mortgages 90 days or more past due and those in foreclosure.
SOURCE: FCIC calculations, based on CoreLogic and Loan Processing Service Inc.

Figure .

spans a . average delinquency rate on the low end and a . average delin-
quency rate on the high end. The full bar for the GSEs spans average delinquency
rates from . to .. That means that only  of GSE loans were in subgroups
with average delinquency rates above .. In sharp contrast, the black bar for pri-
vate-label subprime securitizations (SUB) spans average delinquency rates between
. on the low end and . on the high end, and the full bar spans average
delinquency rates between . and .. That means that only  of SUB loans
were in subgroups with average delinquency rates below . The worst-performing
 of GSE loans are in subgroups with rates of serious delinquency similar to the
best-performing  of SUB loans. 
By the end of , performance within all segments of the market had weakened.
The median delinquency rate—the midpoints of the black bars—rose from  in
 to . for GSE loans, from  to  for SUB loans, from  to  for
Alt-A loans, and remained at roughly  for FHA loans.
The data illustrate that in  and , GSE loans performed significantly bet-
ter than privately securitized, or non-GSE, subprime and Alt-A loans. That holds
true even when comparing loans in GSE pools that share the same key characteristics
with the loans in privately securitized mortgages, such as low FICO scores. For exam-
ple, among loans to borrowers with FICO scores below , a privately securitized
mortgage was more than four times as likely to be seriously delinquent as a GSE.